Definition: Cash remaining from an investment after accounting for the income-tax effect attributable to that investment under the stated assumptions.
Example
Before-tax cash flow is $12,000 and the attributable tax cost is $3,000, producing $9,000 after-tax cash flow.
Keep the distinction clear
Taxable income and cash flow differ. Depreciation, principal payments, loss limitations, and tax benefits can affect the calculation differently.
Related terms
Before-Tax Cash Flow · Cash Flow · Taxable Income
Keep studying
References: FREC Course II syllabus, Session 14
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