Canadian Income Taxation, 2024/2025:
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Planning and Decision Making 26 zx zx zx zx
th Edition zx
By William Buckwold zx zx
Complete Chapter Solutions Manual ar
zx zx zx zx
e included (Ch 1 to 23)
zx zx zx zx zx
** Immediate Download
zx zx
** Swift Response
zx zx
** All Chapters included
zx zx zx
** Excel Solutions
zx zx
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 204-2025 Ed.
zx zx zx zx zx zx zx zx zx
CHAPTER 1 zx
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING zx zx zx zx zx zx
Review Questions
zx
1. If income tax is imposed after profits have been determined, why is taxation relevant t
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
o business decision making?
zx zx zx
2. Most business decisions involve the evaluation of alternative courses of action. For ex
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ample, a marketing manager may be responsible for choosing a strategy for establishi
zx zx zx zx zx zx zx zx zx zx zx zx
ng sales in new geographical territories. Briefly explain how the tax factor can be an inte
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
gral part 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 resp
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
onsibility?
4. What is an ―after-tax‖ approach to decision making?
zx zx zx zx zx zx zx
. 1
Instructor Solutions Manual Chapter One
zx zx zx zx
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 20242025 Ed.
zx zx zx zx zx zx zx zx x
Solutions to Review Questions
zx zx zx
R1-
1 Once profit is determined, the Income Tax Act determines the amount of income tax
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that results. However, at all levels of management, alternative courses of action are eval
zx zx zx zx zx zx zx zx zx zx zx zx zx
uated. In many cases, the choice of one alternative over the other may affect both the am
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ount and the timing of future taxes on income generated from that activity. Therefore, th
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e person making those decisions has a direct input into future after-
zx zx zx zx zx zx zx zx zx zx zx
tax cash flow. Obviously, decisions that reduce or postpone the payment of tax affect th
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e ultimate return on investment and, in turn, the value of the enterprise. Including the ta
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x variable as a part of the formal decision process will ultimately lead to improved after-
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tax cash flow. zx zx
R1-
2 Expansion can be achieved in new geographic areas through direct selling, or by est
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ablishing a formal presence in the new territory with a branch office or a separate corp
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
oration. The new territories may also cross provincial or international boundaries. Provin
zx zx zx zx zx zx zx zx zx zx zx
cial income tax rates vary amongst the provinces. The amount of income that is subject
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to tax in the new province will be different for each of the three alternatives mentioned
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above. For example, with direct selling, none of the income is taxed in the new provinc
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e, but with a separate corporation, all of the income is taxed in the new province. Beca
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
use the tax cost is different in each case, taxation is a relevant part of the decision and mu
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
st be included in any cost-
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benefit analysis that compares the three alternatives [Reg. 400-402.1].
zx zx zx zx zx zx zx zx
R1-
3 A basic understanding of the following variables will significantly strengthen a decisio
zx zx zx zx zx zx zx zx zx zx zx zx
n maker's ability to apply tax issues to their area of responsibility.
zx zx zx zx zx zx zx zx zx zx zx
Types of Income zx zx -
Employment, Business, Property, Capital gains Ta zx zx zx zx zx
xable Entities zx - Individuals, Corporations, Trusts zx zx
Alternative Business zx -
Corporation, Proprietorship, Partnership, Limited Str zx zx zx zx
uctures partnership, Joint arrangement, Income trust zx zx zx zx
Tax Jurisdictions zx - Federal, Provincial, Foreign zx zx
R1-
4 All cash flow decisions, whether related to revenues, expenses, asset acquisitions or
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divestitures, or debt and equity restructuring, will impact the amount and timing of the t
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ax cost. Therefore, cash flow exists only on an after tax basis, and, the tax impacts wheth
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
er or not 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 alternati
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
ve courses of action to minimize the tax cost, in the same way that decisions are made
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xregarding other types of costs. zx zx zx zx
Failure to apply an after- zx zx zx zx
tax approach at the time that decisions are made may provide inaccurate informatio
zx zx zx zx zx zx zx zx zx zx zx zx
n for evaluation, and, result in a permanently inefficient tax structure.
zx zx zx zx zx zx zx zx zx zx
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 204-2025 Ed.
zx zx zx zx zx zx zx zx zx
CHAPTER 1 zx
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
zx zx zx zx zx zx
. 2
Instructor Solutions Manual Chapter One
zx zx zx zx
zx zx zx
Planning and Decision Making 26 zx zx zx zx
th Edition zx
By William Buckwold zx zx
Complete Chapter Solutions Manual ar
zx zx zx zx
e included (Ch 1 to 23)
zx zx zx zx zx
** Immediate Download
zx zx
** Swift Response
zx zx
** All Chapters included
zx zx zx
** Excel Solutions
zx zx
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 204-2025 Ed.
zx zx zx zx zx zx zx zx zx
CHAPTER 1 zx
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING zx zx zx zx zx zx
Review Questions
zx
1. If income tax is imposed after profits have been determined, why is taxation relevant t
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
o business decision making?
zx zx zx
2. Most business decisions involve the evaluation of alternative courses of action. For ex
zx zx zx zx zx zx zx zx zx zx zx zx
ample, a marketing manager may be responsible for choosing a strategy for establishi
zx zx zx zx zx zx zx zx zx zx zx zx
ng sales in new geographical territories. Briefly explain how the tax factor can be an inte
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
gral part of this decision.
zx zx zx zx
3. What are the fundamental variables of the income tax system that decision-
zx zx zx zx zx zx zx zx zx zx zx
makers should be familiar with so that they can apply tax issues to their areas of resp
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
onsibility?
4. What is an ―after-tax‖ approach to decision making?
zx zx zx zx zx zx zx
. 1
Instructor Solutions Manual Chapter One
zx zx zx zx
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 20242025 Ed.
zx zx zx zx zx zx zx zx x
Solutions to Review Questions
zx zx zx
R1-
1 Once profit is determined, the Income Tax Act determines the amount of income tax
z x zx zx zx zx zx zx zx zx zx zx zx zx zx zx
that results. However, at all levels of management, alternative courses of action are eval
zx zx zx zx zx zx zx zx zx zx zx zx zx
uated. In many cases, the choice of one alternative over the other may affect both the am
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
ount and the timing of future taxes on income generated from that activity. Therefore, th
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
e person making those decisions has a direct input into future after-
zx zx zx zx zx zx zx zx zx zx zx
tax cash flow. Obviously, decisions that reduce or postpone the payment of tax affect th
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
e ultimate return on investment and, in turn, the value of the enterprise. Including the ta
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
x variable as a part of the formal decision process will ultimately lead to improved after-
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
tax cash flow. zx zx
R1-
2 Expansion can be achieved in new geographic areas through direct selling, or by est
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ablishing a formal presence in the new territory with a branch office or a separate corp
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
oration. The new territories may also cross provincial or international boundaries. Provin
zx zx zx zx zx zx zx zx zx zx zx
cial income tax rates vary amongst the provinces. The amount of income that is subject
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
to tax in the new province will be different for each of the three alternatives mentioned
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above. For example, with direct selling, none of the income is taxed in the new provinc
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e, but with a separate corporation, all of the income is taxed in the new province. Beca
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
use the tax cost is different in each case, taxation is a relevant part of the decision and mu
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
st be included in any cost-
zx zx zx zx zx
benefit analysis that compares the three alternatives [Reg. 400-402.1].
zx zx zx zx zx zx zx zx
R1-
3 A basic understanding of the following variables will significantly strengthen a decisio
zx zx zx zx zx zx zx zx zx zx zx zx
n maker's ability to apply tax issues to their area of responsibility.
zx zx zx zx zx zx zx zx zx zx zx
Types of Income zx zx -
Employment, Business, Property, Capital gains Ta zx zx zx zx zx
xable Entities zx - Individuals, Corporations, Trusts zx zx
Alternative Business zx -
Corporation, Proprietorship, Partnership, Limited Str zx zx zx zx
uctures partnership, Joint arrangement, Income trust zx zx zx zx
Tax Jurisdictions zx - Federal, Provincial, Foreign zx zx
R1-
4 All cash flow decisions, whether related to revenues, expenses, asset acquisitions or
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divestitures, or debt and equity restructuring, will impact the amount and timing of the t
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
ax cost. Therefore, cash flow exists only on an after tax basis, and, the tax impacts wheth
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
er or not the ultimate result of the decision is successful. An after-
zx zx z x z x z x z x z x z x z x z x z x z x
tax approach to decision-making requires each decision-maker to think "after-
z x z x z x zx zx zx zx zx zx
tax" for every decision at the time the decision is being made, and, to consider alternati
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
ve courses of action to minimize the tax cost, in the same way that decisions are made
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx z
xregarding other types of costs. zx zx zx zx
Failure to apply an after- zx zx zx zx
tax approach at the time that decisions are made may provide inaccurate informatio
zx zx zx zx zx zx zx zx zx zx zx zx
n for evaluation, and, result in a permanently inefficient tax structure.
zx zx zx zx zx zx zx zx zx zx
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 204-2025 Ed.
zx zx zx zx zx zx zx zx zx
CHAPTER 1 zx
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
zx zx zx zx zx zx
. 2
Instructor Solutions Manual Chapter One
zx zx zx zx
