Canadian Income Taxation, 2023/2024:
x@ x@ x@
Planning and Decision Making 2
x@ x@ x@ x@
6th Edition
x@
By William Buckwold
x@ x@
Complete Chapter Solutions Manual a
x@ x@ x@ x@
re included (Ch 1 to 23)
x@ x@ x@ x@ x@
** Immediate Download
x@ x@
** Swift Response
x@ x@
** All Chapters included
x@ x@ x@
** Excel Solutions
x@ x@
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-
x@ x@ x@ x@ x@ x@ x@ x@
CHAPTER 1 x@
TAXATION― ITS ROLE IN BUSINESS DECISION MAKIN
x@ x@ x@ x@ x@ x@
Review Questions
x@
1. If income tax is imposed after profits have been determined, why is taxation rele
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
vant to business decision making?
x@ x@ x@ x@
2. Most business decisions involve the evaluation of alternative courses of action. F
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
or example, a marketing manager may be responsible for choosing a strategy for
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x
@ establishing sales in new geographical territories. Briefly explain how the tax factor
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
can be an integral part of this decision.
x@ x@ x@ x@ x@ x@ x@
3. What are the fundamental variables of the income tax system that decision-
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
makers should be familiar with so that they can apply tax issues to their areas o
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
f responsibility?
x@
4. What is an ―after-tax‖ approach to decision making?
x@ x@ x@ x@ x@ x@ x@
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-
x@ x@ x@ x@ x@ x@ x@ x@
. 1
Instructor Solutions Manual Chapter One
x@ x@ x@ x@
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-
x@ x@ x@ x@ x@ x@ x@ x@
CHAPTER 1 x@
Solutions to Review Questions
x@ x@ x@
TAXATION― ITS ROLE IN BUSINESS DECISION MAKIN x@ x@ x@ x@ x@ x@
R1-
1 Once profit is determined, the Income Tax Act determines the amount of incom
x @ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
e tax that results. However, at all levels of management, alternative courses of acti
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
on are evaluated. In many cases, the choice of one alternative over the other may
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
affect both the amount and the timing of future taxes on income generated from th
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
at activity. Therefore, the person making those decisions has a direct input into fut
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ure after-x@
tax cash flow. Obviously, decisions that reduce or postpone the payment of tax aff
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ect the ultimate return on investment and, in turn, the value of the enterprise. Incl
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
uding the tax variable as a part of the formal decision process will ultimately lead
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x
@ to improved after-tax cash flow.
x@ x@ x@ x@
R1-
2 Expansion can be achieved in new geographic areas through direct selling, or b
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
y establishing a formal presence in the new territory with a branch office or a sep
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
arate corporation. The new territories may also cross provincial or international bou
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ndaries. Provincial income tax rates vary amongst the provinces. The amount of in
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
come that is subject to tax in the new province will be different for each of the th
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ree alternatives mentioned above. For example, with direct selling, none of the inc
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ome is taxed in the new province, but with a separate corporation, all of the inco
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
me is taxed in the new province. Because the tax cost is different in each case, ta
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
xation is a relevant part of the decision and must be included in any cost-
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
benefit analysis that compares the three alternatives [Reg. 400-402.1].
x@ x@ x@ x@ x@ x@ x@ x@
R1-
3 A basic understanding of the following variables will significantly strengthen a de
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
cision maker's ability to apply tax issues to their area of responsibility.
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
x@ x@ x@
Planning and Decision Making 2
x@ x@ x@ x@
6th Edition
x@
By William Buckwold
x@ x@
Complete Chapter Solutions Manual a
x@ x@ x@ x@
re included (Ch 1 to 23)
x@ x@ x@ x@ x@
** Immediate Download
x@ x@
** Swift Response
x@ x@
** All Chapters included
x@ x@ x@
** Excel Solutions
x@ x@
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-
x@ x@ x@ x@ x@ x@ x@ x@
CHAPTER 1 x@
TAXATION― ITS ROLE IN BUSINESS DECISION MAKIN
x@ x@ x@ x@ x@ x@
Review Questions
x@
1. If income tax is imposed after profits have been determined, why is taxation rele
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
vant to business decision making?
x@ x@ x@ x@
2. Most business decisions involve the evaluation of alternative courses of action. F
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
or example, a marketing manager may be responsible for choosing a strategy for
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x
@ establishing sales in new geographical territories. Briefly explain how the tax factor
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
can be an integral part of this decision.
x@ x@ x@ x@ x@ x@ x@
3. What are the fundamental variables of the income tax system that decision-
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
makers should be familiar with so that they can apply tax issues to their areas o
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
f responsibility?
x@
4. What is an ―after-tax‖ approach to decision making?
x@ x@ x@ x@ x@ x@ x@
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-
x@ x@ x@ x@ x@ x@ x@ x@
. 1
Instructor Solutions Manual Chapter One
x@ x@ x@ x@
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-
x@ x@ x@ x@ x@ x@ x@ x@
CHAPTER 1 x@
Solutions to Review Questions
x@ x@ x@
TAXATION― ITS ROLE IN BUSINESS DECISION MAKIN x@ x@ x@ x@ x@ x@
R1-
1 Once profit is determined, the Income Tax Act determines the amount of incom
x @ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
e tax that results. However, at all levels of management, alternative courses of acti
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
on are evaluated. In many cases, the choice of one alternative over the other may
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
affect both the amount and the timing of future taxes on income generated from th
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
at activity. Therefore, the person making those decisions has a direct input into fut
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ure after-x@
tax cash flow. Obviously, decisions that reduce or postpone the payment of tax aff
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ect the ultimate return on investment and, in turn, the value of the enterprise. Incl
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
uding the tax variable as a part of the formal decision process will ultimately lead
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x
@ to improved after-tax cash flow.
x@ x@ x@ x@
R1-
2 Expansion can be achieved in new geographic areas through direct selling, or b
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
y establishing a formal presence in the new territory with a branch office or a sep
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
arate corporation. The new territories may also cross provincial or international bou
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ndaries. Provincial income tax rates vary amongst the provinces. The amount of in
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
come that is subject to tax in the new province will be different for each of the th
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ree alternatives mentioned above. For example, with direct selling, none of the inc
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
ome is taxed in the new province, but with a separate corporation, all of the inco
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
me is taxed in the new province. Because the tax cost is different in each case, ta
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
xation is a relevant part of the decision and must be included in any cost-
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
benefit analysis that compares the three alternatives [Reg. 400-402.1].
x@ x@ x@ x@ x@ x@ x@ x@
R1-
3 A basic understanding of the following variables will significantly strengthen a de
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
cision maker's ability to apply tax issues to their area of responsibility.
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@
