Debt and tax
How gearing, interest, tenor, moratorium and DSRA build a levered analysis, and how corporate tax, MAT and depreciation build a post-tax one.
Debt Financing and Tax are two independent switches on the 🏦 Finance tab. Both are off by default, so a fresh run is the simple pre-tax project model; turning either on adds a layer of cash flow on top of it, without requiring the other.
Levered analysis (debt financing)
Turning on Enable debt (levered analysis) finances part of the Total CAPEX with a loan instead of equity, sized as Gearing (Debt) — a percentage of Total CAPEX — at the Interest Rate you set. The loan is repaid over the Repayment Tenor, in equal-principal instalments, after however many years of Moratorium you allow before repayment starts. See Financing and discounting for all five fields, with their defaults and ranges.
Turning debt on is also what brings three further figures into play: Equity IRR is computed only when debt is enabled; WACC is computed only for a levered project; and DSCR is meaningful only once there's debt to service. See Return metrics for what each one means.
DSRA
DSRA, in months of debt service, sizes a reserve funded upfront alongside equity — (DSRA months ÷ 12) × the first year's interest and principal — and released back, net of any remaining debt, in the project's final year. It defaults to no reserve at all.
Post-tax analysis (tax)
Turning on Enable tax (post-tax analysis) adds a tax cash flow, built from two rates and a depreciation method: Corporate Tax Rate, the normal corporate rate; MAT Rate, the Minimum Alternate Tax rate; and Tax Depreciation, a choice between WDV (Written-Down-Value, at the WDV Dep. Rate you set) and Straight-line.
Enabling tax is reflected in Post-tax IRR, on the Financials tab's second summary line, which differs from both the headline Project IRR and the exported report's salvage-aware Project IRR (pre-tax) figure.
Where to go next
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Payment delay and working capital
How Receivable Lag turns into a working-capital carrying cost, and where its impact on IRR and NPV is reported.