Return on Software: Maximizing the Return on Your Software Investment

Chapter 17. The Consequences of Income Taxes on Business Decisions

As explained in Chapter 16, the before- and after-tax cash-flow streams for an alternative can be significantly different and, because of that, the desirability of an alternative will be quite different in before- and after-tax terms. There are some additional issues that may impact, or be impacted by, income taxes, including the following:

• Interest expenses

• Interest income

• Depreciation method

• Depreciation recovery period

• Capital gains and losses for corporations

• Gain or loss when selling or scrapping depreciable assets

• Comparing financing methods in after-tax cash flow terms

• After-tax analysis of replacements

This chapter discusses each of these additional issues and shows how they ...