Chapter 7 - McGill Faculty of Engineering MIME 310...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
McGill Faculty of Engineering MIME 310 Engineering Economy hapter 7 – axation utline Chapter 7 Taxation There are two things certain in life – death and taxes ”, Benjamin Franklin Introduction ypes of taxes Outline Section 1: Types of taxes Tax bases Depreciation for tax purposes he Canadian Capital Cost Allowance system Section 2: The Canadian Capital Cost Allowance system Carry forward/backward provision Capital Gains/Losses Section 3: t i 4 Tax Factors Operating costs Capital expenditures Section 4: Treatment of salvage values in the Canadian system Determination of an after-tax cash flow distribution Tax advantage of integrated companies Section 5: Section 6: 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
McGill Faculty of Engineering MIME 310 Engineering Economy New Simplified Tax Form 1040 EZ 2 DO TAX FORM 1. How much money did you make last year? $ _________ Send it to us 2. Send it to us. B Please make cheque payable to Revenue Canada N.B. Please make cheque payable to Revenue Canada. 2
Background image of page 2
McGill Faculty of Engineering MIME 310 Engineering Economy Section 1: Introduction Introduction Project evaluation techniques described in the previous chapter essentially remain the same; the elements that change are the cash flows: they are reduced by the tax liabilities. Taxation is complex and subject to frequent changes The objectives of this chapter are: escribe the major elements of taxation Describe the major elements of taxation Show some important particularities of the Canadian tax system Show how taxation affects projects and project evaluation Illustrate how taxation effects can be accounted for in simple cases 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
McGill Faculty of Engineering MIME 310 Engineering Economy Section 1: Introduction Taxation is an integral part of project evaluation, i.e. an added cost of doing business The effect on operating expenses versus capital expenditures is not the same because of their different tax treatment (expensing versus depreciating). Thus, the preferred alternative on a f b i i t i l t h f t before-tax basis is not necessarily the same on an after-tax basis. 4
Background image of page 4
McGill Faculty of Engineering MIME 310 Engineering Economy Section 1: Introduction Types of Taxes l d t t Sales and property tax Duties on imports, excise taxes on gasoline, cigarettes and “ ooze” booze Personal income taxes usiness taxes rporate income taxes Business taxes – corporate income taxes Tax Basis Value of transaction/property or quantity purchased Salary and investment income Revenue (i.e. royalty) Profit, i.e. [Revenues - Costs] 5 Profitability, i.e. [Revenues - Costs - Cost of Capital]
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
McGill Faculty of Engineering MIME 310 Engineering Economy Federal Excise Tax Provincial Fuel Tax oods and Services Tax Provincial Sales Tax Goods and Services Tax verall Tax Rate Overall Tax Rate 9.43 / 25.00 = 37.7 % Ultramar gets 62.3 % of $25!!!
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/22/2010 for the course ENG MIME 310 taught by Professor Jassim during the Spring '10 term at McGill.

Page1 / 50

Chapter 7 - McGill Faculty of Engineering MIME 310...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online