ACTG 6730 Lecture Notes - Lecture 8: Life Insurance, Net Present Value, Income Splitting
4 Aug 2018
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Should spend money on advertising when you are not making any income. If landlord paid, credit can be shared with the tenant. Capital budgeting: firms with tax losses can shelter taxable earnings from new projects which increases their after-tax npv. Marginal analysis: have after tax cash flows, not net income on excel, enjoy the benefit of a lower tax rate to reduce selling price and sell more volume. Tax and nontax costs: deciding on where to manufacture products based on tax costs and labour costs, consider compensation on either a pre-tax basis or after-tax basis. Income splitting opportunities for family members are arguably the same for a sole proprietorship and a corporation: advantages of incorporating a small business, limited liability for shareholders. Income splitting opportunities: lend money to a student in the family. Tax me a bit higher now so that i can receive the benefit of losses against other income.
