15.12 Impact of inflation and tax on project appraisal Flashcards
1
Q
What is inflation?
A
An increase in the money price of goods and services leading to a general decline in the real value of the purchasing power of money.
2
Q
How might tax impact on cash flows?
A
- tax reductions on profit figures
- tax relief for an acquired asset
- tax on sale or disposal of assets
3
Q
What is a “writing down” allowance?
A
A tax relief on the value of assets.
