Canadian Income Taxation, 2023/2024:
rv rv rv
Planning and Decision Making 26 rv rv rv rv
th Edition rv
By William Buckwold rv rv
Complete Chapter Solutions Manual ar
rv rv rv rv
e included (Ch 1 to 23)
rv rv rv rv rv
** Immediate Download
rv rv
** Swift Response
rv rv
** All Chapters included
rv rv rv
** Excel Solutions
rv rv
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
rv rv rv rv rv rv rv rv rv
CHAPTER 1 rv
TAXATION― ITS ROLE IN BUSINESS DECISION MAKINGrv rv rv rv rv rv
Review Questions
rv
1. If income tax is imposed after profits have been determined, why is taxation relevant to
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business decision making? rv rv
2. Most business decisions involve the evaluation of alternative courses of action. For exa
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mple, a marketing manager may be responsible for choosing a strategy for establishing
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sales in new geographical territories. Briefly explain how the tax factor can be an integral p
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art of this decision.
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3. What are the fundamental variables of the income tax system that decision-
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makers should be familiar with so that they can apply tax issues to their areas of respon
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
sibility?
4. What is an “after-tax” approach to decision making?
rv rv rv rv rv rv rv
. 1
Instructor Solutions Manual Chapter One
rv rv rv rv
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
rv rv rv rv rv rv rv rv rv
Solutions to Review Questions
rv rv rv
R1-
1 Once profit is determined, the Income Tax Act determines the amount of income tax th
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at results. However, at all levels of management, alternative courses of action are evaluat
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ed. In many cases, the choice of one alternative over the other may affect both the amount
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and the timing of future taxes on income generated from that activity. Therefore, the pers
rv rv rv rv rv rv rv rv rv rv rv rv rv rv
on making those decisions has a direct input into future after-
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tax cash flow. Obviously, decisions that reduce or postpone the payment of tax affect the
rv rv rv rv rv rv rv rv rv rv rv rv rv rv r
vultimate return on investment and, in turn, the value of the enterprise. Including the tax v
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ariable as a part of the formal decision process will ultimately lead to improved after-
rv rv rv rv rv rv rv rv rv rv rv rv rv rv
tax cash flow. rv rv
R1-
2 Expansion can be achieved in new geographic areas through direct selling, or by establ
rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ishing a formal presence in the new territory with a branch office or a separate corporatio
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n. The new territories may also cross provincial or international boundaries. Provincial inc
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ome tax rates vary amongst the provinces. The amount of income that is subject to tax in
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv r
vthe new province will be different for each of the three alternatives mentioned above. For
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vexample, with direct selling, none of the income is taxed in the new province, but with a s
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eparate corporation, all of the income is taxed in the new province. Because the tax cost i
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s different in each case, taxation is a relevant part of the decision and must be included in a
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ny cost-benefit analysis that compares the three alternatives [Reg. 400-402.1].
rv rv rv rv rv rv rv rv rv
R1-
3 A basic understanding of the following variables will significantly strengthen a decision
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maker's ability to apply tax issues to their area of responsibility.
rv rv rv rv rv rv rv rv rv rv
Types of Income rv rv -
Employment, Business, Property, Capital gains Ta rv rv rv rv rv
xable Entities rv - Individuals, Corporations, Trusts rv rv
Alternative Business rv -
Corporation, Proprietorship, Partnership, Limited Str rv rv rv rv
uctures partnership, Joint arrangement, Income trust rv rv rv rv
Tax Jurisdictions rv - Federal, Provincial, Foreign rv rv
R1-
4 All cash flow decisions, whether related to revenues, expenses, asset acquisitions or di
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vestitures, or debt and equity restructuring, will impact the amount and timing of the tax c
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ost. Therefore, cash flow exists only on an after tax basis, and, the tax impacts whether or n
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ot the ultimate result of the decision is successful. An after-
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tax approach to decision-making requires each decision-maker to think "after-
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tax" for every decision at the time the decision is being made, and, to consider alternative
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vcourses of action to minimize the tax cost, in the same way that decisions are made rega
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
rding other types of costs.
rv rv rv rv
Failure to apply an after- rv rv rv rv
tax approach at the time that decisions are made may provide inaccurate information
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vfor evaluation, and, result in a permanently inefficient tax structure.
rv rv rv rv rv rv rv rv rv
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
rv rv rv rv rv rv rv rv rv
CHAPTER 1 rv
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
rv rv rv rv rv rv
. 2
Instructor Solutions Manual Chapter One
rv rv rv rv
rv rv rv
Planning and Decision Making 26 rv rv rv rv
th Edition rv
By William Buckwold rv rv
Complete Chapter Solutions Manual ar
rv rv rv rv
e included (Ch 1 to 23)
rv rv rv rv rv
** Immediate Download
rv rv
** Swift Response
rv rv
** All Chapters included
rv rv rv
** Excel Solutions
rv rv
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
rv rv rv rv rv rv rv rv rv
CHAPTER 1 rv
TAXATION― ITS ROLE IN BUSINESS DECISION MAKINGrv rv rv rv rv rv
Review Questions
rv
1. If income tax is imposed after profits have been determined, why is taxation relevant to
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
business decision making? rv rv
2. Most business decisions involve the evaluation of alternative courses of action. For exa
rv rv rv rv rv rv rv rv rv rv rv rv
mple, a marketing manager may be responsible for choosing a strategy for establishing
rv rv rv rv rv rv rv rv rv rv rv rv rv
sales in new geographical territories. Briefly explain how the tax factor can be an integral p
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
art of this decision.
rv rv rv
3. What are the fundamental variables of the income tax system that decision-
rv rv rv rv rv rv rv rv rv rv rv
makers should be familiar with so that they can apply tax issues to their areas of respon
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
sibility?
4. What is an “after-tax” approach to decision making?
rv rv rv rv rv rv rv
. 1
Instructor Solutions Manual Chapter One
rv rv rv rv
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
rv rv rv rv rv rv rv rv rv
Solutions to Review Questions
rv rv rv
R1-
1 Once profit is determined, the Income Tax Act determines the amount of income tax th
r v rv rv rv rv rv rv rv rv rv rv rv rv rv rv
at results. However, at all levels of management, alternative courses of action are evaluat
rv rv rv rv rv rv rv rv rv rv rv rv rv
ed. In many cases, the choice of one alternative over the other may affect both the amount
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
and the timing of future taxes on income generated from that activity. Therefore, the pers
rv rv rv rv rv rv rv rv rv rv rv rv rv rv
on making those decisions has a direct input into future after-
rv rv rv rv rv rv rv rv rv rv
tax cash flow. Obviously, decisions that reduce or postpone the payment of tax affect the
rv rv rv rv rv rv rv rv rv rv rv rv rv rv r
vultimate return on investment and, in turn, the value of the enterprise. Including the tax v
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ariable as a part of the formal decision process will ultimately lead to improved after-
rv rv rv rv rv rv rv rv rv rv rv rv rv rv
tax cash flow. rv rv
R1-
2 Expansion can be achieved in new geographic areas through direct selling, or by establ
rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ishing a formal presence in the new territory with a branch office or a separate corporatio
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
n. The new territories may also cross provincial or international boundaries. Provincial inc
rv rv rv rv rv rv rv rv rv rv rv rv
ome tax rates vary amongst the provinces. The amount of income that is subject to tax in
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv r
vthe new province will be different for each of the three alternatives mentioned above. For
rv rv rv rv rv rv rv rv rv rv rv rv rv rv r
vexample, with direct selling, none of the income is taxed in the new province, but with a s
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
eparate corporation, all of the income is taxed in the new province. Because the tax cost i
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
s different in each case, taxation is a relevant part of the decision and must be included in a
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ny cost-benefit analysis that compares the three alternatives [Reg. 400-402.1].
rv rv rv rv rv rv rv rv rv
R1-
3 A basic understanding of the following variables will significantly strengthen a decision
rv rv rv rv rv rv rv rv rv rv rv rv rv
maker's ability to apply tax issues to their area of responsibility.
rv rv rv rv rv rv rv rv rv rv
Types of Income rv rv -
Employment, Business, Property, Capital gains Ta rv rv rv rv rv
xable Entities rv - Individuals, Corporations, Trusts rv rv
Alternative Business rv -
Corporation, Proprietorship, Partnership, Limited Str rv rv rv rv
uctures partnership, Joint arrangement, Income trust rv rv rv rv
Tax Jurisdictions rv - Federal, Provincial, Foreign rv rv
R1-
4 All cash flow decisions, whether related to revenues, expenses, asset acquisitions or di
rv rv rv rv rv rv rv rv rv rv rv rv rv
vestitures, or debt and equity restructuring, will impact the amount and timing of the tax c
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ost. Therefore, cash flow exists only on an after tax basis, and, the tax impacts whether or n
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
ot the ultimate result of the decision is successful. An after-
r v r v r v r v r v r v r v r v r v r v
tax approach to decision-making requires each decision-maker to think "after-
r v r v r v rv rv rv rv rv rv
tax" for every decision at the time the decision is being made, and, to consider alternative
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv r
vcourses of action to minimize the tax cost, in the same way that decisions are made rega
rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv rv
rding other types of costs.
rv rv rv rv
Failure to apply an after- rv rv rv rv
tax approach at the time that decisions are made may provide inaccurate information
rv rv rv rv rv rv rv rv rv rv rv rv r
vfor evaluation, and, result in a permanently inefficient tax structure.
rv rv rv rv rv rv rv rv rv
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
rv rv rv rv rv rv rv rv rv
CHAPTER 1 rv
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
rv rv rv rv rv rv
. 2
Instructor Solutions Manual Chapter One
rv rv rv rv
