Dear John, From my studies I understand that when an NPV question considers cash flow of tax deductions and allowances that I should adjust the cost of capital ( eg. tax is 25%, then i should use the discount factor of 9%.) And where tax is ignored, we use the pre tax rate.
I have found practice questions that don’t do this tax adjustment to the discount factor so I am confused. Could you please enlighten me?
Many many thanks for you continued support. Roisin