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NPV Question

Forums › ACCA Forums › ACCA FM Financial Management Forums › NPV Question

  • This topic has 1 reply, 2 voices, and was last updated 12 years ago by AvatarSangria9.
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  • December 5, 2013 at 6:39 am #150444
    Avatarmassivecodedake
    Participant
    • Topics: 10
    • Replies: 2
    • ☆

    why the additional working capital required is not included in the tax calculation? THX

    December 5, 2013 at 5:49 pm #150749
    AvatarSangria9
    Member
    • Topics: 25
    • Replies: 282
    • ☆☆☆

    @massivecodedake
    If assume that additional $100k is needed to finance trade receivables, that will be required for sales in current project, it will not bring any additional tax payments or tax reliefs. It is cash term. Not profit/loss.
    Tax is payed on profit, not just cash flows.

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