Abstract. The mainstream in Finance studies recognizes the impact of tax shields on capital budgeting. This study offers some evidences regarding a bias in direct investment projects valuation in the case of taking into account of the allowance of recovery of the losses recorded in the past financial exercises from future profits as long as the classical indicators (e.g., Net Present Value) are used. Also, this tax regime seems to favour the adoption of less-performer projects by lessperformer companies, as long as these projects should be otherwise rejected by a performer company.

Keywords: capital budgeting; tax shields; recovery of losses; net present value; cash flows.