The Rule of 72 States That Grows at Some Exponential

question 51

Multiple Choice

The rule of 72 states that grows at some exponential rate of z percent

• A) will double in value in approximately 72 years.
• B) will double in value in approximately 72 ÷ z years.
• C) will double in value in approximately 72 * z years.
• D) will double in value in approximately 72^z years.

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Definitions:

Temporary Differences

The differences between the accounting income and taxable income that are not permanent and will reverse in future periods.

Permanent Differences

These are variations between taxable income and accounting income that originate from certain items being recognized in one manner for tax purposes and another for financial reporting purposes and do not reverse over time.

Pretax Financial Accounting

The process of preparing financial statements that calculate revenues, expenses, and earnings before taxes are deducted.

Taxable Income

The portion of income that is subject to income tax after adjustments, deductions, and exemptions are applied.