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Which of the following is NOT a component of the expected annual after-tax cash…

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Wize University Introduction to Finance Textbook > Cash Flow Estimation

Annual Cash Cash Flows

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Which of the following is NOT a component of the expected annual after-tax cash flows?
More Annual Cash Cash Flows Questions:
Why do we add the result from the CCA tax shield to the NPV analysis?
Because CCA is a non-cash item, in estimating the annual after-tax cash flows, we deal with it using one of the following two approaches:
I. Deduct CCA from operating income, then deduct the associated taxes payable, and finally add the amount of the CCA tax savings back.
II. Multiply the CCA by the company’s effective tax rate and add this amount to the after-tax operating income.