Explain why $1 today is not equal to $1 in the future. Why is understanding this concept particularly important for tax planning? What tax strategy exploits this concept?
What will be an ideal response?
Assuming an investor can earn a positive return (e.g., 5 percent), $1 invested today should be worth $1.05 in one year. Hence, $1 today is equivalent to $1.05 in one year.
Taxes paid are cash outflows, and tax savings generated from tax deductions can be thought of as cash inflows. With this perspective, the timing of when a taxpayer pays tax on income or receives a tax deduction for an expenditure obviously affects the present value of the taxes paid (i.e., a cash outflow) or tax savings received (i.e., a cash inflow).
The timing strategy exploits this concept.
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A product ________ is a group of products linked through usage, customer profile, price points, and distribution channels.
A. core B. mix C. form D. line E. cycle
With a finite-source model, increasing the arrival rate by 10 percent and also increasing the service rate by 10 percent will result in:
A) a decrease in the utilization of the server. B) no change in the average number of customers in the system. C) an increase in the average number of customers in the waiting line. D) an increase in the waiting time in line.
Because danger invites rescue, those people who attempt to rescue others and get hurt in the process must bear the costs of their harms themselves
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT considered to be an operating expense on the income statement?
A) administrative expenses and overhead B) corporate taxes C) salaries D) depreciation and amortization