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Hi John
Would the Apv calculation differ if there was no loss in the first year?
No.
APV calculations do not affect the cash flows – they are the same whether we are discounting at the WACC or whether we are taking an APV approach.
The APV approach only affects the discount rate we use for the cash flows (and, of course, then we then have to adjust the base case NPV by the tax shield on the debt raised and by any subsidised loans).
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