Stochastic and Global Optimization

G. Dzemyda

ISBN 10: 1441952098 / ISBN 13: 9781441952097

Published by Springer, Springer Dez 2010, 2010

About this Item

This item is printed on demand - Print on Demand Titel. Neuware -In the paper we propose a model of tax incentives optimization for inve- ment projects with a help of the mechanism of accelerated depreciation. Unlike the tax holidays which influence on effective income tax rate, accelerated - preciation affects on taxable income. In modern economic practice the state actively use for an attraction of - vestment into the creation of new enterprises such mechanisms as accelerated depreciation and tax holidays. The problem under our consideration is the following. Assume that the state (region) is interested in realization of a certain investment project, for ex- ple, the creation of a new enterprise. In order to attract a potential investor the state decides to use a mechanism of accelerated tax depreciation. The foll- ing question arise. What is a reasonable principle for choosing depreciation rate From the state¿s point of view the future investor¿s behavior will be rat- nal. It means that while looking at economic environment the investor choose such a moment for investment which maximizes his expected net present value (NPV) from the given project. For this case both criteria and ¿investment rule¿ depend on proposed (by the state) depreciation policy. For the simplicity we will suppose that the purpose of the state for a given project is a maximi- tion of a discounted tax payments into the budget from the enterprise after its creation. Of course, these payments depend on the moment of investor¿s entry and, therefore, on the depreciation policy established by the state.Springer-Verlag KG, Sachsenplatz 4-6, 1201 Wien 252 pp. Englisch.

Seller Inventory # 9781441952097

Bibliographic Details

• Title: Stochastic and Global Optimization
• Publisher: Springer, Springer Dez 2010
• Publication Date: 2010
• Language: English
• ISBN 10: 1441952098
• ISBN 13: 9781441952097
• Binding: Taschenbuch
• Condition: Neu
• Dimensions: 235W x 155H x 14D millimeters 235 millimeters width by 155 millimeters height by 14 millimeters depth
• Weight: 388 grams

About this title

Synopsis

In the paper we propose a model of tax incentives optimization for inve- ment projects with a help of the mechanism of accelerated depreciation. Unlike the tax holidays which influence on effective income tax rate, accelerated - preciation affects on taxable income. In modern economic practice the state actively use for an attraction of - vestment into the creation of new enterprises such mechanisms as accelerated depreciation and tax holidays. The problem under our consideration is the following. Assume that the state (region) is interested in realization of a certain investment project, for ex- ple, the creation of a new enterprise. In order to attract a potential investor the state decides to use a mechanism of accelerated tax depreciation. The foll- ing question arise. What is a reasonable principle for choosing depreciation rate? From the state’s point of view the future investor’s behavior will be rat- nal. It means that while looking at economic environment the investor choose such a moment for investment which maximizes his expected net present value (NPV) from the given project. For this case both criteria and “investment rule” depend on proposed (by the state) depreciation policy. For the simplicity we will suppose that the purpose of the state for a given project is a maximi- tion of a discounted tax payments into the budget from the enterprise after its creation. Of course, these payments depend on the moment of investor’s entry and, therefore, on the depreciation policy established by the state.