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To: M Kehoe
Businesses always figure tax consequences into pricing.

Wrong-O....

They have no way of knowing what they're tax obligation will be because they do not know if their sales volume will place them above their "break even point." If they make a profit, then they have income tax obligations. But not if they operate at a loss.

And since they have no idea what their income tax obligation will be, there is no-way to pro-rate it into their cost structure prior to the sale. If they try it that way, a competitor will undercut their price with a bid that steals away the sales volume.

23 posted on 03/10/2010 8:43:04 PM PST by Willie Green
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To: Willie Green
And since they have no idea what their income tax obligation will be,...

Sure they do, at the very least the capital gain tax rates, what ever that may be at the time.

If you don't figure that, you have no idea what your ROI will be.

5.56mm

24 posted on 03/10/2010 8:47:32 PM PST by M Kehoe
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