How to Calculate NPV with Taxes

Income taxes affect a company's cash flows and should therefore be taken into consideration when calculating the Net Present Value (NPV) of a project. For example, depreciation is a non-cash expense, but it serves as a tax deduction that reduces a company's tax liability by its marginal tax rate. To account for taxes, you can first convert all cash flows to after-tax cash flows and then discount the after-tax cash flows to their present value.—
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[GururajSapkal]

This was the exact type of problem I was searching for!!

[milenamilojevic]

Dude, you saved my presentation. Thank you!!

[waleedbaig]

Appreciate your effort. that's what i was looking forrrr.. Thank you Sir

[angelali]

Hi Edspira, in some questions, they do deduct the taxes in year 0, why is that the case when we don't deduct it in year 0 here?

[HalifaxHercules]

Is there a Canadian version of this tutorial, especially with the 1/2 year rule for assets used prior to 2019 and accelerated rule between 2019 and 2028?

In Canada, if you used an asset prior to 2019, you have to use the 1/2 year rule, meaning that the 1st year depreciation rate is 10.5%.

For most assets used between 2019 and 2024, you use the accelerated rule for year one at 1.5 times the depreciation rate, which is 31.5%.

[vijithsoman]

What if there is interest payment too?

[brettwood]

i thought depreciation wasnt included when calculating npv