I am confused about the formula computing cash flows after taxes (CFAT): Taxes payable = (NOI - depreciation - interest) x tax rate cash flow after tax (CFAT) = NOI - debt service - taxes payable what is the difference between interest and debt service? how come CFAT is not NOI - interest - taxes payable? please refer to schweser notes bk4 page 334-335. Thank you for your help
"what is the difference between interest and debt service? " Debt service is the total repayments made to debt, including interest and principal. "how come CFAT is not NOI - interest - taxes payable? " because NOI - debt service = Before Tax cash flow. ATCF = BTCF - taxes payable.