The total after-tax cash flow for Year 2 of the project will consist of the net after-tax operating cash flow plus the depreciation tax shield for the year. Depreciation expense is a non-cash transaction that is not included in the after-tax operating cash flow, and it should not be added back in. Depreciation expense is used only to calculate the amount of the depreciation tax shield, which is a cash flow item. Depreciation expense is a non-cash transaction that is not included in the after-tax operating cash flow, and it should not be added back in. Depreciation expense is used only to calculate the amount of the depreciation tax shield, which is a cash flow item. Depreciation expense is a non-cash transaction that is not included in the after-tax operating cash flow, and it should not be added back in. Depreciation expense is used only to calculate the amount of the depreciation tax shield, which is a cash flow item. The total after-tax cash flow for Year 2 of the project will include the net after-tax operating cash flow, but that is not the only thing it will include.
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