Adjusted present value model for capital budgeting decision. This is one of the methods used to do capital budgeting for a levered firm. This method takes into account the tax shield value associated with tax deduction for interest expense. The formula can be written as: APV ¼ NPV þ TcD, where APV ¼ Adjusted present value; NPV ¼ Net present value; Tc ¼ Marginal corporate tax rate; D ¼ Total corporate debt; and TcD ¼ Tax shield value. This method is based upon M&M Proposition I with tax.