economic and book depreciation

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February 28, 2017 at 9:03 am #374701
vapiano91
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if both economic and book depreciation are given, is this treatment right in the FCF to firm method?

Profit before tax
Add: book depreciation
less: economic depreciation

and the remaining exactly as we do normally?

There are no tax implications of economic depreciation right?

Thankyou!!
February 28, 2017 at 4:35 pm #374760
John Moffat
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That is correct, but economic depreciation was only in the past relevant when being asked to calculate EVA.

EVA is no longer in the syllabus for Paper P4.
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