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Sir I want to ask part a since the after tax cost of capital is given but still why they have taken before cost of capital . Present value of net saving at 10% why they have divided they should discount I guess sir??? I don’t understand
Part (a) of the question specifically says ‘Ignore taxation in this part of the question’.
Also, they have discounted!!!! When it is a perpetuity (as it is here) we discount by dividing by the interest rate.
I do suggest that you watch my free lectures.
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