CFAI says “Accounting income includes interest expense and income taxes in its calculation and IGNORES WORKING CAPITAL.”
Schweser only said that accounting income includes int(1-tax rate), and that depreciation is based on cost of investment, not market value. Does this above statement just mean that when calculating Outlay and Terminal Non-Operating After-Tax Cash Flow, you leave out working capital investment entirely? Does it affect the calculation of after-tax cash flow?
Schweser only said that accounting income includes int(1-tax rate), and that depreciation is based on cost of investment, not market value. Does this above statement just mean that when calculating Outlay and Terminal Non-Operating After-Tax Cash Flow, you leave out working capital investment entirely? Does it affect the calculation of after-tax cash flow?