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Hello Mr. John,
I just want to confirm from you about the treatment of the below line.” An investment equivalent to the amount of depreciation to keep its non-current assets base at the present productive capacity.The current dep vharge already included in the operating profit margin is 25% of the non current assets of $50 million. ”
Acc to me,
We dont reduce the TAD amount from operating profit. Neither we add back the amount after calculation of cash flow after tax.Kindly advice.
Wishing you good health.
We do reduce the operating profit by the amount but we do not add back the TAD.
But in the answer,TAD has not been reduced from operating profit. Tax is calculated on
Sales. 48600
Less interest. (3500)
= 45100
Less tax(45100*25%). 11275Kindly advice me.
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