Stephen A. Ross,
Massachusetts Institute of Technology
Randolph W. Westerfield,
University of Southern California
Bradford D. Jordan,
University of Kentucky
Gordon S. Roberts,
York University
| Average Tax Rate | Total taxes paid divided by total taxable income.
(See Refer to page 42)
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| Balance Sheet | Financial statement showing a firm's accounting value on a particular date.
(See Refer to page 27)
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| Capital Cost Allowance (CCA) | Depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications.
(See Refer to page 45, 301)
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| Capital Gains | The increase in value of an investment over its purchase price.
(See Refer to page 43)
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| Cash Flow from Assets | The total of cash flow to bondholders and cash flow to stockholders, consisting of the following: operating cash flow, capital spending, and additions to net working capital.
(See Refer to page 35)
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| Cash Flow to Creditors | A firm's interest payments to creditors less net new borrowings.
(See Refer to page 37)
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| Cash Flow to Shareholders | Dividends paid out by a firm less net new equity raised.
(See Refer to page 37)
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| Dividend Tax Credit | Tax formula that reduces the effective tax rate on dividends.
(See Refer to page 43)
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| Free Cash Flow | Another name for cash flow from assets.
(See Refer to page 37)
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| Generally Accepted Accounting Principles (GAAP) | The common set of standards and procedures by which audited financial statements are prepared.
(See Refer to page 31)
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| Half-year Rule | CCRA's requirement to figure CCA on only one half of an asset's installed cost for its first year of use.
(See Refer to page 46)
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| Income Statement | Financial statement summarizing a firm's performance over a period of time.
(See Refer to page 32)
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| Loss Carry-forward, Carry-back | Using a year's capital losses to offset capital gains in past or future years.
(See Refer to page 45)
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| Marginal Tax Rate | Amount of tax payable on the next dollar earned.
(See Refer to page 42)
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| Net Acquisitions | Total installed cost of capital acquisitions minus adjusted cost of any disposals within an asset pool.
(See Refer to page 47)
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| Non-cash Items | Expenses charged against revenues that do not directly affect cash flow, such as depreciation.
(See Refer to page 34)
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| Operating Cash Flow | Cash generated from a firm's normal business activities.
(See Refer to page 35)
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| Realized Capital Gains | The increase in value of an investment converted to cash.
(See Refer to page 44)
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| Recaptured Depreciation | The taxable difference between adjusted cost of disposal and UCC when UCC is greater.
(See Refer to page 48)
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| Terminal Loss | The difference between UCC and adjusted cost of disposal when UCC is greater.
(See Refer to page 47)
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2002 McGraw-Hill Higher Education