Inflation and After-Tax Cash-Flow Streams
Some of the components in a proposal's before-tax cash-flow stream will be affected by inflation and others will not. Unless you are already explicitly accounting for inflation (Chapter 13), cash flows for revenues, operating and maintenance costs, and future salvage values will probably be expressed in constant dollars. And, even though you may be already accounting for inflation, cash flows for loans and repayment schedules, lease fees, and taxes paid will probably be expressed in actual dollars. Depreciation amounts will also be in actual dollars.
|
When calculating after-tax cash flows from before-tax cash flows, use actual dollar analysis. |
If a decision analysis needs to account for income taxes and ...
Get Return on Software: Maximizing the Return on Your Software Investment now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
