The Portable MBA in Finance and Accounting, 3rd Edition

308 Planning and Forecasting are f lawed. If the objective of the firm is to maximize investors’ wealth, the al- ternative rules ...

Planning Capital Expenditure 309 cleanup cost that would have to be paid after the payback horizon. Although the rule incorporat ...

310 Planning and Forecasting maybe 30% this time. At 30%, the NPV is −$13.35. Apparently, 30% is too high. The next guess should ...

Planning Capital Expenditure 311 accepted. When a project has two or more IRRs, the analyst would have no way of knowing which w ...

312 Planning and Forecasting trademark. The second new paradigm we will brief ly examine is known as “real options.” Economic Va ...

Planning Capital Expenditure 313 Measures such as payback period, discounted payback period, and inter- nal rate of return (IRR) ...

314 11 TAXES AND BUSINESS DECISIONS Richard P. Mandel It is not possible to fully describe the federal taxation system in the sp ...

Taxes and Business Decisions 315 early successes, through the acquisition of a related business, to intergenera- tional successi ...

316 Planning and Forecasting The distribution to Morris beyond his reasonable salary would likely be characterized by the IRS as ...

Taxes and Business Decisions 317 This election is recommended in a number of circumstances. One exam- ple is the corporation tha ...

318 Planning and Forecasting tax. This gift tax supplements the federal estate tax, which imposes a tax on the transfer of asset ...

Taxes and Business Decisions 319 that was postponed. If Morris has been using the LIFO method, his subchap- ter S election will ...

320 Planning and Forecasting amount of loss is limited by a stockholder ’s basis in his investment in the cor- poration. Basis i ...

Taxes and Business Decisions 321 by a healthy long-term capital gain. Thus, an investor with high taxable income could be offere ...

322 Planning and Forecasting The second reason Morris is not concerned is that he does not anticipate any losses from this busin ...

Taxes and Business Decisions 323 after they were incurred). Since a corporation with significant losses would normally be valued ...

324 Planning and Forecasting The acquirer may have lost any carryfor wards other wise available, but it does obtain the right to ...

Taxes and Business Decisions 325 EXECUTIVE COMPENSATION Brad’s compensation package raises a number of interesting tax issues th ...

326 Planning and Forecasting enhanced, since he pays no taxes on the salary he does not receive and escapes from the limitations ...

Taxes and Business Decisions 327 employees of the corporation on a nondiscriminatory basis with respect to the plan, thus render ...