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Sir how do we find out see Sensitivy of a project to changes in capital expenditure which will attract TAD over 5years?
Can you explain in as much detail as poivle… I have my exam in few hours
As always in sensitivity calculations, you divide the NPV by the PV of the flows that will change. In this case the flows that will change are the initial expenditure and the tax savings resulting from the associated capital allowances.