Initial Year Loss Ltd (IYL) made a huge loss (of Rs 60 crores) in the previous financial year. IYL is confident of makin

[answerhappygod]

Initial Year Loss Ltd (IYL) made a huge loss (of Rs 60 crores)
in the previous financial year. IYL is confident of making profits
of Rs 10 crores p.a. (assumed uniform) for several years to come.
IYL has been advised that the tax regulations allow a set off of
the past losses against profits in the future (subiect to
conditions) thereby altracting a reduced'nil tax liability in
future. Further, you were taught in FM course that cost of debt
needs to be tax- adjusted for calculating the overall cost of
capital. What are the arguments, FOR and/or AGAINST, for doing the
tax adjustment for calculating the cost of capital for
IYL