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Marketing expenditure is a one time expense. Why are we using it while calculating NPV? I thought we don’t include such expenditures
Ok I got it. The question said that it’s a tax allowable expense hence we included it. My question is had the question not mentioned of any such thing, would we have excluded this expenditure?
It is nothing to do with the fact that it is tax allowable!!
We include all future cash flows (including marketing) – the question says that the expenditure is incurred after the launch of the Milland and therefore it is included, just as we include all cash flows.
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