Question: 1 a the Question (40%) (a) How should goods be taxed according to the reverse elasticity rule? Comment. (20%) (b) Assume that the tax life

1 a the Question (40%) (a) How should goods be taxed

1 a the Question (40%) (a) How should goods be taxed according to the reverse elasticity rule? Comment. (20%) (b) Assume that the tax life of a business machine is 10 years and its acquisition price is 100,000. Let's also say that the annual depreciation rate is 10% and the corporate income tax rate is 20%. How much will the machine really cost the business? this if the interest rate is 5%? (20%) 1 a the Question (40%) (a) How should goods be taxed according to the reverse elasticity rule? Comment. (20%) (b) Assume that the tax life of a business machine is 10 years and its acquisition price is 100,000. Let's also say that the annual depreciation rate is 10% and the corporate income tax rate is 20%. How much will the machine really cost the business? this if the interest rate is 5%? (20%)

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