Examples shipping and installation 15 certified

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Unformatted text preview: expenses of the period in which th they were incurred. Examples: Shipping and installation 15 Certified Financial Controller CFC Sale or Disposal of a Depreciable Asset p • Generally, the sale of a “capital asset” y, (as defined by the IRS) generates a capital gain (asset sells for more than book value) or capital loss (asset sells for less than book value). • Often historically, capital gains income has received more favorable US tax treatment than operating income. 16 Certified Financial Controller CFC 8 Corporate Capital Gains / Losses • Currently, capital gains are taxed at ordinary income tax rates for corporations, or a maximum 35%. • Capital losses are deductible only against capital gains. 17 Certified Financial Controller CFC Calculating the Incremental Cash Flows Initial cash outflow the initial net cash • Initial cash outflow – the initial net cash investment. • Interim incremental net cash flows – those net cash flows occurring after the initial cash investment but not including the final period’s cash flow. • T...
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