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Second, accelerate cash flows; given the time value of money, cash received earlier has a higher present value. In analyzing the potential benefits of these strategies, consideration must be given to the (1) time value of money when accelerating income/deferring deductions; (2) foreign tax implications to related controlled foreign companies that receive discounts for prepayments of inventory; and (3) timing and ability to unwind the strategies. All of the above calculations ignore the effects of taxes and the time value of money. |
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