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Hi sir
When we are told that the above is the case, ie the deprecation is equivalent to the investment needed to maintain operations, how do we treat this if we are using the method where we calculate the cash flow separately as depreciation multiplied by tax, after the post tax cash flow has been calculated (rather than the adding and then subtracting the full amount)
Thanks
You simple have an extra cash outflow equal to the amount of the deprecation. It does not affect the tax calculations.
So would we include this negative cash flow (full depreciation amount) after we have already calculated the tax on operating flow?
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