List two circumstances in which obtaining capital allowances on the reducing balance basis is more beneficial than on the straight-line basis
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List two circumstances in which obtaining capital allowances on the reducing balance basis is more beneficial than on the straight-line basis
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- Explain two circumstances in which obtaining capital allowances on the reducing balance basis is more beneficial than on the straight-line basis.For tax purposes where interest expense on margin loan is deductible for investment purposes , can capital gains or increased borrowing be withdrawn somehow or segregated to determine prorated deductibility?Explain why the cost of capital is measured on an after-tax basis why is use of a weighted average cost of capital rather the cost of the specific source of funds recommended?
- Retirement programs, unemployment benefits, financial aid and other expenses that involve transfers of money are considered _________________. a. Capital expenditure b. Consumption c. Utilization d. Transfer paymentsExplain, with appropriate examples, the difference between capital expenditure and revenue expenditure.(a) Explain the difference between: Capital expenditure and revenue expenditure, giving an example of each. (b) Explain the difference between the receivables collection period and the payables payment period. Why is it generally preferable for the receivables collection period to be shorter than the payables payment period?
- The modified internal rate of return (MRR) test is designed to address a limitation associated withthe use of the internal rate of return (IRR). What is that limitation?a) Working capital requirementb) Income taxesc) Reinvestment rated) Depreciation expenseExplain, using practical example how Capital expenditure should be capitalized?How do taxpayers determine whether they should deduct their itemized deductions or utilize the standard deduction? Under what circumstances would you expect the after-tax return from an investment in a capital asset to approach that of tax-exempt assets (assuming equal before-tax rates of return)?
- How is a business activity distinguished from an investment activity? why is this distinction important for the purpose of calculating federal income taxes? What types of losses may potentially be characterized as passive losses?the process of reducing the allowable deduction of interest expense by a certain percentage is called? a) tax arbitrage b) tax minimization c) tax avoidance d) tax limitation