- This topic has 3 replies, 2 voices, and was last updated 5 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
Hi,
Need to ask that in an investment appraisal questions, usually we have positive operating cash flows before tax but if for some reason we have one or two negative cash flows before tax, then do we have a tax charge or tax claim??Thanks
A negative operating cash flows results in a tax inflow. (It is because we always assume that the company is already making profits elsewhere and is therefore already paying tax. Therefore a ‘loss’ from our new project simply reduced the existing profit of the company and therefore saves tax.)
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘Investment Appraisal and Tax’ is closed to new replies.