FMF9

Syllabus D2. Allowing for Inflation & Tax in DCF 6 / 12

a) Apply and discuss the real-terms and nominal-terms approaches to investment appraisal.
b) Calculate the taxation effects of relevant cash flows, including the tax benefits of tax-allowable
depreciation and the tax liabilities of taxable profit.
c) Calculate and apply before- and after-tax discount rates.
Allowing for Inflation & Tax in DCF