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In the calculation of APV, please help me to explain why TAD is just to be deducted from operating cash flow before tax but it is not added back to taxable profit as other question in calculation of NPV?
The TAD has not been subtracted in arriving at the operating cash flow, and therefore there is no need to be added back.
The tax has been calculated separately in workings 1.
I do explain in my free lectures why this approach is better in Paper AFM because of the possibility of there being tax losses.
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