Southern New Hampshire University 4-2 Activity: Cost-Benefit Analysis1

TAX 655 Module Four Activity Guidelines and Rubric

Scenario

Business entities are often looking at ways to identify tax incentives that benefit their companies. Cost-benefit analysis can be used to help determine the potential impact of changes a company is considering implementing.

You are a staff accountant who has calculated a cost-benefit for a client. You are putting together a cost-benefit analysis PowerPoint to present to your manager regarding the information on your client. Prepare a 3- to 4-slide PowerPoint to present your findings.

This activity will help you evaluate and explain the results of a cost-benefit analysis. This will help you with Project Two, where you will make recommendations for optimal tax planning strategies.

Cost-Benefit Formula

Total benefits from the project = Increase in revenue from expansion

• Revenue increase + Additional revenue increase = Total benefits

Costs

• New employee salary + Hiring expense + Technology costs (hardware and software) = Total costs

Cost-benefit ratio

• Total benefits / Total costs = Cost-benefit ratio

Directions

Create a PowerPoint presentation with speaker notes of your cost-benefit analysis based on the provided client information. You will present this to your manager. Read the provided scenario and Excel spreadsheet with calculations completed. Additionally, use the Shapiro Library Accounting Resources Guide and research current tax laws to consider how they apply to the cost-benefit analysis. Specifically, you must address the following:

1. Explain the impact of estimated costs and benefits on this company. Consider the following in your response:

   Explain the details of the estimated costs
   Determine the potential benefits

2. Summarize the goal of reducing the tax liability. Consider the following in your response:

   Identify the tax effect of implementing the incentive
   Consider if the tax savings will continue to future years

Evaluate the results of the cost-benefit analysis. Consider the following in your response:

Consider what the company may gain from this analysis
Provide recommendations on the next steps for the company

Solar Bear Limited Expansion
Cost-Benefit Analysis
A
B
C
D
E
F
G
Consideration
Total
Benefits
Revenue Increase
Additional Revenue Increase
Total Benefits (A+B)
400,000
37,500
437,500
Costs
New Employee Salary
Hiring Expense
Technology Costs (Hardware and
Software)
Total Costs (D+E+F)
Benefit-Cost Ratio
240,000
15,000
30,000
285,000
1.5
PowerPoint Speaker Notes Tutorial
This tutorial will show you how to create speaker notes for a PowerPoint presentation. You will also
learn how to save and convert the speaker notes to a Word file for submission.
Creating Speaker Notes
1. From the menu ribbon, click on the View tab.
2. By default, the “Presentation View” should be Normal. Select Normal if it is not already
selected. From the “Show” submenu, select Notes. This will display the box for speaker notes at
the bottom of each slide.
Saving and Exporting Speaker Notes
1. Ensure your PowerPoint presentation is completed, including all of your slides and speaker
notes. On the View tab, make sure that the Normal and Notes options are selected.
2. Click on the File tab of the menu ribbon. The menu options will open in a pane on the left of the
screen.
3. In the File menu options, select Export.
4. From the Export submenu, select Create Handouts. Then click the Create Handouts button. This
will bring you back to your PowerPoint slides, where you will see a dialog box.
5. In the dialog box, choose the option Notes below slides. This will allow the content on each
slide to be more visible and readable. Check to make sure that the Paste option is selected
under “Add Slides to Microsoft Word document.” Then click OK to begin the conversion.
6. The conversion may take some time to run, depending on the size of your presentation. When
the conversion is finished, Microsoft Word will open with a document containing each slide and
any speaker notes underneath.
7. Add your name to the Word document containing your slides and speaker notes. Save and
submit this file, along with any other deliverables for your assignment, in the assignment
submission area in your course.