present value of losses - saving of $120,000 present value...

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operating profit/(losses) losses offset net cash flow discount factor @12% working: in year 3 company have to pay $120,000 because on $300,000 they have to pay 40% tax which means saving of $120,000 due to offsetting of previous losses. in year 4 loss of $100,000 have been set off which means tax saving of $40,000 discount factor @12% in year 3 is
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Unformatted text preview: saving of $120,000 present value discount factor @12% in year 4 is saving of $100000 present value total saving in present value is year 1 year 2 year 3 year 4-250000-150000 300000 450000-300000-100000-250000-150000 350000 0.89 0.8 0.71 0.64 0.71 $120,000 $85,320 0.64 $100,000 $63,500 $148,820...
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present value of losses - saving of $120,000 present value...

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