NPV Tax relief

BPP have simply copied the examiners answer, which was wrong. Tax depreciation is always calculated on the original cost, with a balancing charge or allowance in the year of sale (as explained in my free lectures). It is only for accounting depreciation (which is irrelevant for NPV's) then the estimated scrap proceeds are taken into account. The examiner accepted this and stated that people would get full marks whichever way they treated the depreciation (even though the strictly correct way is to calculate it on the original cost).