- This topic has 3 replies, 2 voices, and was last updated 4 years ago by .
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘Investment Appraisal and Tax’ is closed to new replies.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Investment Appraisal and Tax
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.)
Thanks!!
You are welcome 🙂