r) Capital Budgeting NPV = n CF =0 (1+R)' OCF=EBIT + Depreciation - Tax OCF-Net Income + Depreciation (when no interest expense) Cash Flow OCF - NCS - Changes in NWC Net salvage cash flow= SP - (SP-BV)*(Tax rate) +r) ected inflation)] -1 WACC = (E/V) * RE+(P/V) * Rp+ (D/V) * RD * (1 Tc) M&M Case I (no tax): (1) VL=VU (2) RE = RA + (RA RD)*(D/E) M&M Case II (with tax): (1) VL=VU+D*TC, V = EBIT*(1-T)/RU