Canadian Income Taxation, 2023/2024:
m m m
Planning and Decision Making 2
m m m m
6th Edition m
By William Buckwold
m m
Complete Chapter Solutions Manual ar
m m m m
e included (Ch 1 to 23)
m m m m m
** Immediate Download
m m
** Swift Response
m m
** All Chapters included
m m m
** Excel Solutions
m m
, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
CHAPTER 1 m
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
m m m m m m
ReviewmQuestions
1. If mincomemtax mismimposedmaftermprofitsmhavembeenmdetermined,mwhy mismtaxationmrelevantmt
ombusinessmdecisionmmaking?
2. Mostmbusinessmdecisionsminvolvemthemevaluationmof malternativemcoursesmof maction.mFormex
ample,mammarketingmmanagermmay mbemresponsiblemformchoosingmamstrategy mformestablishi
ngmsalesminmnewmgeographicalmterritories.mBriefly mexplainmhowmthemtax mfactormcanmbemanmint
egralmpartmof mthismdecision.
3. Whatmaremthemfundamentalmvariablesmof mthemincomemtaxmsystemmthatmdecision-
makersmshouldmbemfamiliarmwithmsomthatmtheymcanmapply mtaxmissuesmtomtheirmareasmof mresp
onsibility?
4. Whatmismanm“after-tax”mapproachmtomdecisionmmaking?
. 1
InstructormSolutionsmManualmChaptermOne
, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
SolutionsmtomReviewmQuestions
R1-
1m Oncemprofitmismdetermined,mthemIncomemTax mActmdeterminesmthemamountmofmincomemtax
mthatmresults.mHowever,matmallmlevelsmof mmanagement,malternativemcoursesmofmactionmaremev
aluated.mInmmany mcases,mthemchoicemof monemalternativemovermthemothermmay maffectmbothmthem
amountmandmthemtimingmofmfuturemtaxesmonmincomemgeneratedmfrommthatmactivity.mTherefor
e,mthempersonmmakingmthosemdecisionsmhasmamdirectminputmintomfuturemafter-
tax mcashmflow.mObviously,mdecisionsmthatmreducemormpostponemthempaymentmof mtax maffectmt
hemultimatemreturnmonminvestmentmand,minmturn,mthemvaluemofmthementerprise.mIncludingmthem
tax mvariablemasmampartmofmthemformalmdecisionmprocessmwillmultimately mleadmtomimprovedmaft
er-tax mcashmflow.
R1-
2mExpansionmcanmbemachievedminmnewmgeographic mareasmthroughmdirectmselling,mormby mest
ablishingmamformalmpresenceminmthemnewmterritorymwithmambranchmofficemormamseparatemcorp
oration.mThemnewmterritoriesmmay malsomcrossmprovincialmorminternationalmboundaries.mProvi
ncialmincomemtax mratesmvarymamongstmthemprovinces.mThemamountmof mincomemthatmismsubje
ctmtomtax minmthemnewmprovincemwillmbemdifferentmformeachmof mthemthreemalternativesmmention
edmabove.mFormexample,mwithmdirectmselling,mnonemof mthemincomemismtaxedminmthemnewmpro
vince,mbutmwithmamseparatemcorporation,mallmof mthemincomemismtaxedminmthemnewmprovince.m
Becausemthemtax mcostmismdifferentminmeachmcase,mtaxationmismamrelevantmpartmof mthemdecisionm
andmmustmbemincludedminmany mcost-
benefitmanalysismthatmcomparesmthemthreemalternativesm[Reg.m400-402.1].
R1-
3mAmbasic munderstandingmof mthemfollowingmvariablesmwillmsignificantly mstrengthenmamdecisio
nmmaker'smability mtomapply mtax missuesmtomtheirmareamof mresponsibility.
Typesmof mIncome -
Employment,mBusiness,mProperty,mCapitalmgainsmT
axablemEntities - Individuals,mCorporations,mTrusts
AlternativemBusiness -
Corporation,mProprietorship,mPartnership,mLimitedmSt
ructures partnership,mJointmarrangement,mIncomemtrust
Tax mJurisdictions - Federal,mProvincial,mForeign
R1-
4mAllmcashmflowmdecisions,mwhethermrelatedmtomrevenues,mexpenses,massetmacquisitionsmorm
divestitures,mormdebtmandmequity mrestructuring,mwillmimpactmthemamountmandmtimingmofmthemt
ax mcost.mTherefore,mcashmflowmexistsmonly monmanmaftermtax mbasis,mand,mthemtax mimpactsmwhe
thermormnotm them ultimatem resultm ofm them decisionm ism successful.m Anm after-
tax m approachm tom decision-makingmrequiresmeachmdecision-makermtomthinkm"after-
tax"mformeverymdecisionmatmthemtimemthemdecisionmismbeingmmade,mand,mtomconsidermalternati
vemcoursesmofmactionmtomminimizemthemtaxmcost,minmthemsamemway mthatmdecisionsmaremmad
emregardingmothermtypesmof mcosts.
Failurem tom apply m anm after-
tax m approachm atm them timem thatm decisionsm arem madem may m provideminaccurateminformation
mformevaluation,mand,mresultminmampermanently minefficientmtax mstructure.
, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
CHAPTER 1 m
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
m m m m m m
. 2
InstructormSolutionsmManualmChaptermOne
m m m
Planning and Decision Making 2
m m m m
6th Edition m
By William Buckwold
m m
Complete Chapter Solutions Manual ar
m m m m
e included (Ch 1 to 23)
m m m m m
** Immediate Download
m m
** Swift Response
m m
** All Chapters included
m m m
** Excel Solutions
m m
, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
CHAPTER 1 m
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
m m m m m m
ReviewmQuestions
1. If mincomemtax mismimposedmaftermprofitsmhavembeenmdetermined,mwhy mismtaxationmrelevantmt
ombusinessmdecisionmmaking?
2. Mostmbusinessmdecisionsminvolvemthemevaluationmof malternativemcoursesmof maction.mFormex
ample,mammarketingmmanagermmay mbemresponsiblemformchoosingmamstrategy mformestablishi
ngmsalesminmnewmgeographicalmterritories.mBriefly mexplainmhowmthemtax mfactormcanmbemanmint
egralmpartmof mthismdecision.
3. Whatmaremthemfundamentalmvariablesmof mthemincomemtaxmsystemmthatmdecision-
makersmshouldmbemfamiliarmwithmsomthatmtheymcanmapply mtaxmissuesmtomtheirmareasmof mresp
onsibility?
4. Whatmismanm“after-tax”mapproachmtomdecisionmmaking?
. 1
InstructormSolutionsmManualmChaptermOne
, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
SolutionsmtomReviewmQuestions
R1-
1m Oncemprofitmismdetermined,mthemIncomemTax mActmdeterminesmthemamountmofmincomemtax
mthatmresults.mHowever,matmallmlevelsmof mmanagement,malternativemcoursesmofmactionmaremev
aluated.mInmmany mcases,mthemchoicemof monemalternativemovermthemothermmay maffectmbothmthem
amountmandmthemtimingmofmfuturemtaxesmonmincomemgeneratedmfrommthatmactivity.mTherefor
e,mthempersonmmakingmthosemdecisionsmhasmamdirectminputmintomfuturemafter-
tax mcashmflow.mObviously,mdecisionsmthatmreducemormpostponemthempaymentmof mtax maffectmt
hemultimatemreturnmonminvestmentmand,minmturn,mthemvaluemofmthementerprise.mIncludingmthem
tax mvariablemasmampartmofmthemformalmdecisionmprocessmwillmultimately mleadmtomimprovedmaft
er-tax mcashmflow.
R1-
2mExpansionmcanmbemachievedminmnewmgeographic mareasmthroughmdirectmselling,mormby mest
ablishingmamformalmpresenceminmthemnewmterritorymwithmambranchmofficemormamseparatemcorp
oration.mThemnewmterritoriesmmay malsomcrossmprovincialmorminternationalmboundaries.mProvi
ncialmincomemtax mratesmvarymamongstmthemprovinces.mThemamountmof mincomemthatmismsubje
ctmtomtax minmthemnewmprovincemwillmbemdifferentmformeachmof mthemthreemalternativesmmention
edmabove.mFormexample,mwithmdirectmselling,mnonemof mthemincomemismtaxedminmthemnewmpro
vince,mbutmwithmamseparatemcorporation,mallmof mthemincomemismtaxedminmthemnewmprovince.m
Becausemthemtax mcostmismdifferentminmeachmcase,mtaxationmismamrelevantmpartmof mthemdecisionm
andmmustmbemincludedminmany mcost-
benefitmanalysismthatmcomparesmthemthreemalternativesm[Reg.m400-402.1].
R1-
3mAmbasic munderstandingmof mthemfollowingmvariablesmwillmsignificantly mstrengthenmamdecisio
nmmaker'smability mtomapply mtax missuesmtomtheirmareamof mresponsibility.
Typesmof mIncome -
Employment,mBusiness,mProperty,mCapitalmgainsmT
axablemEntities - Individuals,mCorporations,mTrusts
AlternativemBusiness -
Corporation,mProprietorship,mPartnership,mLimitedmSt
ructures partnership,mJointmarrangement,mIncomemtrust
Tax mJurisdictions - Federal,mProvincial,mForeign
R1-
4mAllmcashmflowmdecisions,mwhethermrelatedmtomrevenues,mexpenses,massetmacquisitionsmorm
divestitures,mormdebtmandmequity mrestructuring,mwillmimpactmthemamountmandmtimingmofmthemt
ax mcost.mTherefore,mcashmflowmexistsmonly monmanmaftermtax mbasis,mand,mthemtax mimpactsmwhe
thermormnotm them ultimatem resultm ofm them decisionm ism successful.m Anm after-
tax m approachm tom decision-makingmrequiresmeachmdecision-makermtomthinkm"after-
tax"mformeverymdecisionmatmthemtimemthemdecisionmismbeingmmade,mand,mtomconsidermalternati
vemcoursesmofmactionmtomminimizemthemtaxmcost,minmthemsamemway mthatmdecisionsmaremmad
emregardingmothermtypesmof mcosts.
Failurem tom apply m anm after-
tax m approachm atm them timem thatm decisionsm arem madem may m provideminaccurateminformation
mformevaluation,mand,mresultminmampermanently minefficientmtax mstructure.
, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
CHAPTER 1 m
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
m m m m m m
. 2
InstructormSolutionsmManualmChaptermOne
