- This topic has 3 replies, 2 voices, and was last updated 8 years ago by
.
- Posts
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?
1. If there is a loss before tax then how can you get the tax benefit of the capital allowances? The capital allowances serve to increase the tax loss which is carried forward against the taxable profit in future years.
2. Yes – you can show it in the base case NPV instead.
- You must be logged in to reply to this topic.