Question
A Propeller had an operating expense of $2,880,000, spare parts inventory had an operating expense of $5,000,000 and operating inventory had an operating expense of
A Propeller had an operating expense of $2,880,000, spare parts inventory had an operating expense of $5,000,000 and operating inventory had an operating expense of $6,000,000. All operating expenses are tax deductible in the year the expense is incurred with the tax rate of 30%. These expenses occurred in Year 0 (cash flow at the start). So, when writing cash flow at the start do i write down the 3 expenses ( -2,880,000, -5,000,000 and -6,000,000) and then add the tax deduction back on a seperate line (+864000, +1,500,000 and + 1,800,000)
So it would look like:
The cashflows at start
Propeller (operating expense) -2,880,000
Spare parts inventory (operating expense) -5,000,000
Operating Inventory (operating expense) -6,000,000
Tax deduction +4,164,000
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