Chapter_12_Income_Taxes

Chapter_12_Income_Taxes - Chapter 12 Income Taxes Copyright...

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Copyright Oxford University Press 2009 Chapter 12 Income Taxes
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Copyright Oxford University Press 2009 Individual income taxes Corporate income taxes Income tax rates at federal and state levels Capital gains and losses for non-depreciated assets After-tax cash flows and after-tax rate of return Spreadsheets and after-tax cash flows Chapter Outline
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Copyright Oxford University Press 2009 Calculate taxes for both individuals and corporations Determine the combined income tax rates and marginal income tax rates Develop after-tax cash flows for a project Evaluate investment alternatives on an after-tax basis including asset disposal Use spreadsheet in solving after-tax economic analysis problems Learning Objectives
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Copyright Oxford University Press 2009 Technology for renewable energy has been available for many years. Transition to greater use of wind power requires a significant investment. Vignette: On with the Wind Federal tax law in the Energy Policy Act of 1992 allowed utilities a “production tax credit” of 1.5¢ per kWh. With the tax credit and the advances in technology, many wind plants can now produce power for less 5¢ per kWh.
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Copyright Oxford University Press 2009 Vignette: On with the Wind Should government support wind energy through tax credit? What are the costs and benefits of wind technology from the perspectives of the producers, consumers, and society in general. Is there any ethical issues? What is the effect on wind energy investment if the wind power production tax credit is allowed to expire, or is extended for only a few years? Using internet, can you determine how tax rates changed throughout the course of the 20 th century? How has this affected the value of tax credits to industry?
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Copyright Oxford University Press 2009 Consider U.S. Government as a partner in every business activity Government shares in the profits from every successful venture through income taxes Government shares in the losses of unprofitable venture through income taxes A Partner in the Business
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Copyright Oxford University Press 2009 Taxable Income of Individuals - Personal Exemption(s) - Itemized or Std. Deduction Wages, salary, etc Interest Income Dividends Capital Gains Unemployment Compensation + Other Incomes Gross Income Gross Income - Retirement Contribution - Other Adjustments Adjusted Gross Income (AGI) Taxable Income
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Copyright Oxford University Press 2009 Taxable Income of Individuals Itemized Deduction: • Medical and dental expenses (exceeding 7.5% of AGI) • State and local income, real estate, and personal property tax • Home mortgage interest • Charitable contributions • Casualty and theft losses (exceeding $100 + 10% of AGI)
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This note was uploaded on 10/19/2011 for the course ENGINEERIN 110 taught by Professor King during the Spring '11 term at UCLA.

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Chapter_12_Income_Taxes - Chapter 12 Income Taxes Copyright...

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