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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › question about Sept / Dec 19 Q1 EVA
The answer showed “Lost tax relief on interest” is $53M, may I know how to calculate it?
Thanks.
Interest paid = 213.
Tax rate 25%
25% x 213 = 53.25, rounded to 53.
If no interest had been paid (to get NOPAT), profits would be 213 higher….but tax would be 53 higher too.