SIR WHAT IF THE PROJECT IS FOR EXAMPLE FOR 5 YERAS BUT THE MACHINE'S USEFUL LIFE IS FOR 7 YEARS(AT THE END OF 7 YEARS THERE ALSO IS A BALANCING ALLOWANCE)
I GUESS WE WILL INCLUDE THE WHOLE 7 YEARS IN APPRAISAL OF THIS PARTICULAR PROJECT AS IT IS A RELEVANT CASH FLOW FOR THE PROJECT SO WE WILL INCLUDE THE TAX BENEFIT AFTER 5 YEARS ALSO.
AM I RIGHT?
Ask the Tutor ACCA FM
TAX ALLOWABLE DEPRECIATION
2y ago#1You are correct
so sir just for details, there is a question degnis co (march june 2016)
in it the first part asks for npv of first 4 years and machine useful life is 10 years
if for example instead of 4 years,the question only asked to calculate npv(without perpetuity), we would have included tad benefit for all 10 years while sales revenue for 4 years only ...right?
2y ago#3I have answered your question
But this particular question says
The company can claim tax allowance depreciation on an SL basis over 10 years.
Do what you are asked to do!
Sign into reply to this topic.