Tramont (December 2011)

Hi Sir, i have some queries with this question:

1. Tax calculation problem

My calculation as below :

In Year One, there is a loss before tax – 2201, then i add the tax benefit of loss which is 20%x 2201=440, and i add back the tax benefit on CA 4000, less WC 3600, my total yr 1 GR cash flow is negative -1361

In year Two, profit before tax 20,007, then i minus the unutilised loss 2201, which become 17806, i deduct tax 20%x17,806 = 3,561.2, add back the tax benefit on CA 4000, less WC 3,924, add back non-cash expenses unutilised loss 2201, my total yr 2 GR cash flow is positive 16,521.80

In year Three, profit before tax 80,664, t i deduct tax 20%x80,664 = 16,132.80, add back the tax benefit on CA 4000, less WC 4,277, my total yr 3 GR cash flow is positive 64,254.20

i compare my answer with the BPP answer, i still can’t find out what wrong with my calculation

2. can i put the Additional US tax, opportunity cost & component contribution into the Base Case NPV calculation?