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Fm capital budgetting
why to treat tax shield as cash Inflow ??
when n how we have to treat it??
Replies (2)
Depreciation is a non-cash expense. However, it is included as an allowable expense for Income Tax purpose. Due to this expense, the total tax outlay decreases to the extent of the Tax rate on depreciation allowed.
I couldn't understand the second part of your question clearly.
I mean to say what clues(hint,words) should question cover??
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