Return on Software: Maximizing the Return on Your Software Investment

Summary

The before- and after-tax cash-flow streams for an alternative can be significantly different and, because of that, the desirability of the alternative will be quite different in before- and after-tax terms. This chapter showed different ways that business decisions are influenced by income taxes. The chapter covered the following major points:

• By allowing taxpayers to deduct interest expenses, the government is effectively reducing the interest rate. Borrowing money might not be quite as expensive as you thought it was.

• Interest income is usually considered taxable income. One common exception is municipal bonds. The tax-free status of these bonds makes them more attractive than a taxable bond at the same interest rate.

• Depreciation methods ...