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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › present value
Hello sir.cud u tell me if this is right
A company receives a perpetuity of $20000 p.a in arrears and pay 30% corporation tax 12 months after the end of the year to which cash flows relate.at a cost of capital of 10% what is the after tax present value?
20000/0.1=200,000
200,000×30%=60000x.909(10%)=54540
200,000-54540=$145460
Yes – that is correct 🙂
