Bryden Corporation is considering two tax planning strategies. Both would produce a $1 million tax savings. One of
the strategies would structure the plan so that the $1 million would represent a temporary book-tax difference, and the other would generate a permanent difference. In general, which plan would the Bryden CFO prefer? Which would a stock analyst reviewing the Bryden valuation prefer?

Question

Quizplus · Accepted Answer

The Answer of Bryden Corporation is considering two tax planning strategies. Both would produce a $1 million tax savings. One of
the strategies would structure the plan so that the $1 million would represent a temporary book-tax difference, and the other would generate a permanent difference. In general, which plan would the Bryden CFO prefer? Which would a stock analyst reviewing the Bryden valuation prefer?

Bryden Corporation Is Considering Two Tax Planning Strategies