Specifically, I am creating a DCF Model in
need help on financial modeling for a new project
Answers
Ron,
Serge had
https://www.proformative.com/
That being said; if you are in a State that doesn't confirm to IRS guidelines, then you might have different tax bases due to different depreciation rules. This is common, but may or may not be meaningful in your situation. Check with your tax accountants.
Cheers,
KP
Ron,
As Keith noted, the Proformative
Accelerated depreciation for tax purposes, currently based on the Modified Accelerated Cost Recovery System (MACRS) mandated by Congress and the IRS for federal income tax purposes, serves to reduce taxes. Straight-line book depreciation for book purposes should not be utilized for cash flow analyses. The applicable tax rate should include the marginal state income tax rate if depreciation is tax deductible for state income tax purposes. However, as correctly noted by Keith, if your company is subject to state tax regulations in a state which doesn't confirm to IRS guidelines, you might have to use different tax bases due to different depreciation rules and varying marginal state tax rates. Also, include tax deductibility – especially the tax depreciation shield and the after-tax cost of debt as the appropriate discount rate – only if the company is subject to income taxes. Immediate tax protection for startups, which are typically in a pre-profit stage, is not applicable. Either set the tax depreciation shield to zero, or alternatively set the marginal tax rate to zero in the absence of taxes.
Separately, under the lease financing option, the lessee deducts the entire lease payment if the lease satisfies IRS criteria and can be classified as tax-oriented, or “guideline”.
The course is accessible at: https://www.proformative.com/courses/lease-vs-buy-training-course .
Regards,
Serge
Hi Ron,
The more recent models are starting to factor in tax planning calculations. In the past, modeling was all done 'pre tax'. Your model indicates it is a more current framework. You should talk with your tax experts/resources to ensure your cash flow does factor in those payments.
As for improving your excel expertice, check out http://www.mrexcel.com/. Odesk also has a good review. https://www.odesk.com/blog/2009/05/excel/
If you also want to factor in more comprehensive modeling, check out www.palisade.com
If you need anything else to improve your success, please let me know.
Kind Regards,
Gerry Anderson