Hi,
we have a debate on how long to depreciate assets in order to calculate post-tax Free Cash Flows to Firm (using accounting or fiscal depreciation).
In a recent project, heavy P&E is depreciated over a 40 year period under accounting approach whilst it can also be depreciated over a 12 year accelerated period for fiscal purposes.
The applied tax rate is the same for either period (19%) but the resulting NPV is lower if we depreciate over 40 years (linked to lower annual tax expense in the earlier years).
Are we correct in applying a 40 year tax period to calculate FCFF (pre-debt approach)?

Question

Hi,
we have a debate on how long to depreciate assets in order to calculate post-tax Free Cash Flows to Firm (using accounting or fiscal depreciation).
In a recent project, heavy P&E is depreciated over a 40 year period under accounting approach whilst it can also be depreciated over a 12 year accelerated period for fiscal purposes. 
The applied tax rate is the same for either period (19%) but the resulting NPV is lower if we depreciate over 40 years (linked to lower annual tax expense in the earlier years).
Are we correct in applying a 40 year tax period to calculate FCFF (pre-debt approach)?