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Sir in warden co , as the question ask to calculate sensitivity of investment in new machine to change in selling price.
1 thing which I want to ask related to this is that as we know formula for sensitivity on selling price is NPV divided by present value of sales. In this question as tax effect was considered so NPV which has came is after tax adjustment, likewise for PV of sales will we also take it after tax adjustment?
Suppose if in question tax was to be ignored, then in that NPV and PV of sales which we will take would be without tax effect na?
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