I. Why is it that you cannot assume that an investment's before-tax cash flow and its resulting incremental taxable income are the same amount? Give one example of an item of income or expense that ordinarily would differ between these two amounts.

II. What are the tax/economic trade-offs between a taxable bond and a deferred asset (e.g., a "SPDA"?

I. Why is it that you cannot assume that an investment's before-tax cash flow and its resulting incremental taxable income are the same amount? Give one example of an item of income or expense that ordinarily would differ between these two amounts. ANSWER: II. What are the tax/economic trade-offs between a taxable bond and a deferred asset (e.g., a "SPDA