The Impact Of Federal Income Tax On Capital Budgeting Equipment Decisions: A Comparative Study Of Hotels In Selected Resort Cities Of The United States, Canada, And The Bahamas

Date of Award




Degree Name

Doctor of Philosophy (Ph.D.)


Interdepartmental Studies


Questionnaires were mailed to all non-residential hotels in Miami Beach, Nassau, and Montreal to determine how they make their capital budgeting decisions for equipment replacement and expansion and how their (differing) income tax environments affect these decisions. Nassau was the "control" group since it does not have any business or personal income tax. The income tax system of the United States offers accelerated depreciation and investment tax credit as incentives for capital expenditures. The income tax system of Canada utilizes the capital cost allowance instead of depreciation, but has a similar public policy objective.The results of this study showed that the responding hotels managers are very unsophisticated in their capital budgeting decision making. Very few of them use any capital budgeting techniques at all, and a large majority of the American and Canadian hotels surveyed do not take into consideration the tax incentives available to them in making their decisions.


Business Administration, Accounting

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