CAPITAL BUDGETTING - NPV
This query is : Resolved
30 November 2007
NET SALES REVENUE 475000
COST OF GOOD SOLD 200000
GENERAL EXPENSES 100000
DEPRICIATION 50000
PBIT 125000
INTEREST 25000
PBT 100000
TAX @ 40% 40000
PROFIT AFTER TAX 60000
Q.1 WHAT IS ANNUAL CASH INFLOW CONSIDERING INTEREST EXCLUSION
PRINCIPLE WITHIN NPV METHOD?
Q.2 WILL WE TAKE TAX SAVING ON INTEREST , REASON?
Q.3 WILL WE IGNORE INTEREST DUE TO ABOVE MENTIONED PRINCIPLE
, GIVE REASON?
I WILL BE THANKFUL FOR YOUR RESPONSE , THANK YOU IN ADVANCE.
COST OF GOOD SOLD 200000
GENERAL EXPENSES 100000
DEPRICIATION 50000
PBIT 125000
INTEREST 25000
PBT 100000
TAX @ 40% 40000
PROFIT AFTER TAX 60000
Q.1 WHAT IS ANNUAL CASH INFLOW CONSIDERING INTEREST EXCLUSION
PRINCIPLE WITHIN NPV METHOD?
Q.2 WILL WE TAKE TAX SAVING ON INTEREST , REASON?
Q.3 WILL WE IGNORE INTEREST DUE TO ABOVE MENTIONED PRINCIPLE
, GIVE REASON?
I WILL BE THANKFUL FOR YOUR RESPONSE , THANK YOU IN ADVANCE.
03 December 2007
PBIT = 125000
Tax = 40% = 50000
PAT = 75000
CFAT = 125000
(Add Depreciation)
This is the case of Interest Exclusion Principle and then you do not consider tax savings.
Tax = 40% = 50000
PAT = 75000
CFAT = 125000
(Add Depreciation)
This is the case of Interest Exclusion Principle and then you do not consider tax savings.
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