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    Profit Estimation of Tax

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    Consider yourself a regulatory tax expert faced with the task of proposing a uniform standad of profit estimation. Given two options: Economic profit estimation and Accounting Profit Estimation. Which one would you establish as the standard for calculating profits? Why?

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    Solution Preview

    Clearly economic profit. The reason is because economic profit includes opportunity cost, and that is more reasonable for tax purposes. For example, if a person volunteers for some organization which ...

    Solution Summary

    Profit estimation is examines for tax.