The Decision to Accept Additional Business Should Be Based on a Comparison

question 2

True/False

The decision to accept additional business should be based on a comparison of the incremental costs of the added production with the additional revenues to be received.

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Definitions:

CCA Rate

Capital Cost Allowance rate, which is the rate at which businesses in certain jurisdictions can claim depreciation on assets for tax purposes.

Marginal Tax Rate

The percentage of tax applied to an individual or entity's next dollar of income, showing the impact of the last dollar earned on their tax liability.

Taxable Income

The amount of an individual’s or a company's income used to determine how much tax they owe the government in a given tax year.

Cash Flow

This term refers to the net amount of cash and cash-equivalents being transferred into and out of a business.