Optimal Dynamic Investment Policy for Different Tax Depreciation Rates and Economic Depreciation Rates
نویسندگان
چکیده
منابع مشابه
Optimal Dynamic Investment Policy under Different Rates for Tax Depreciation and Economic Depreciation
This paper analyzes the consequences of incorporating a different rate for tax depreciation than for economic depreciation. Firms most often choose their tax depreciation rate in a strategic way. It would therefore be a coincidence if this optimization process leads to a tax depreciation rate that equals the economic depreciation rate. The implications of a difference between tax depreciation a...
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There are strong incentives to delay or accelerate investment to take advantage of predictable changes in after-tax prices. For sufficiently long-lived capital goods, these incentives are so strong that the intertemporal elasticity of investment demand is nearly infinite. For temporary tax changes, the equilibrium shadow price of long-lived capital goods should fully reflect the tax subsidy reg...
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This paper studies how the difference between technical depreciation and tax depreciation affects the firm’s optimal investment strategy. The objective is maximization of shareholder value. When tax depreciation differs from technical depreciation, an additional investment not only generates value due to the fact that the firm can produce more, but also due to the fact that an additional deferr...
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ژورنال
عنوان ژورنال: Journal of Optimization Theory and Applications
سال: 2000
ISSN: 0022-3239,1573-2878
DOI: 10.1023/a:1004650906179