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12 Cards in this Set
- Front
- Back
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Net Cash Flow
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difference between cash received and cash disbursed
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time value of money
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dollar available today is worth more than a dollar available tomorrow because the current dollar can be invested immediately
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discount rate
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after-tax rate of interest on invested funds for the deferral period
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NPV
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sum of present values of cash inflows and outflows from the transaction
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Annuity
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constant dollar payment at the end of a period
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Annuity Due
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constant dollar payment at the beginning of the period
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Tax Costs and Tax Savings
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Tax Cost is a cash outflow
Tax Savings is a cash inflow |
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PLR - private letter ruling
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managers can ask IRS to analyze a proposed transaction and conclude how the tax law should be applied
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Marginal Tax rate uncertainty
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rate can change over time
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bilateral tax planning
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private parties in private market transaction can work together to minimize aggregate tax cost of the transcation
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Arm's length transaction
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unrelated parties dealing in their own self-interest.
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Related party transaction
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family members or subsidiary companies
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