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The qs says:tax credits and charges will be paid or received 12 mths after they arise,but in the bpp answer they have taken the tax effect in yr1 although in yr1 the cash in flowing so shudnt the tax effect be in yr2?
Thanks
I do not have the BPP answer so I cannot comment on what they have done.
However in the examiners answer, the tax on the operating flows has been taken 1 year after the flow.
(Although when he calculates the tax benefit of the debt interest, he takes the first saving at time 1. You could argue that it should first be taken at time 2, and that would be OK if you had done.)
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