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Hello Sir, in this question for sensitivity analysis, we consider flows after tax..for revenue. Will the case be same for expenses also?
As we will make a benefit if expense increase?Yes. You take the NPV as a % of the PV of the flows that change.
So just as in this question we take 75% of the revenue because a change in revenue will change the tax payable by 25% of the change, you would do exactly the same if you had been asked for the sensitivity of an expense 🙂
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