Canadian Income Taxation 2022/2023 > TEST BANK > Solution manual for Canadian Income Taxation 20222023 25th Edition by William Buckwold, Joan Kitunen (All)

Solution manual for Canadian Income Taxation 20222023 25th Edition by William Buckwold, Joan Kitunen, Matthew Roman -stamped

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CHAPTER 1 TAXATION― ITS ROLE IN BUSINESS DECISION MAKING Review Questions 1. If income tax is imposed after profits have been determined, why is taxation relevant to business decision making? 2... . Most business decisions involve the evaluation of alternative courses of action. For example, a marketing manager may be responsible for choosing a strategy for establishing sales in new geographical territories. Briefly explain how the tax factor can be an integral part of this decision. 3. What are the fundamental variables of the income tax system that decision-makers should be familiar with so that they can apply tax issues to their areas of responsibility? 4. What is an ―after-tax‖ approach to decision making? 1 stumerit@gmail.com Solutions to Review Questions R1-1 Once profit is determined, the Income Tax Act determines the amount of income tax that results. However, at all levels of management, alternative courses of action are evaluated. In many cases, the choice of one alternative over the other may affect both the amount and the timing of future taxes on income generated from that activity. Therefore, the person making those decisions has a direct input into future after-tax cash flow. Obviously, decisions that reduce or postpone the payment of tax affect the ultimate return on investment and, in turn, the value of the enterprise. Including the tax variable as a part of the formal decision process will ultimately lead to [Show More]

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