SELECTING AMONG ALTERNATIVE DEPRECIATION METHODS: A STOCHASTIC DOMINANCE APPROACH

A whole-firm simulation model (FLIPSIM V) was used to simulate the net present value probability distributions for sixteen alternative tax strategies on equipment depreciation for a rice farm in Texas. Stochastic dominance was used to determine the utility maximizing tax strategy for decision makers in alternative risk preference classes. The most preferred income tax strategy for both risk loving and averse decision makers utilized straight-line cost recovery, Section 179 expensing, maximum I.T.C. with resulting basis reduction, and trade rather than sell on disposition of old equipment.


Issue Date:
1983-08
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/279113
Language:
English
Total Pages:
18




 Record created 2018-10-25, last modified 2020-10-28

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