Nonrefundable Tax Credits

question 112

Multiple Choice

Nonrefundable tax credits

• A)only offset a taxpayer's tax liability.
• B)may only be used if the taxpayer is receiving a refund.
• C)can be carried back two years and carried forward 15 years if they exceed tax liability in the current year.
• D)allow the excess over the taxpayer's tax liability to be paid to the taxpayer.

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Definitions:

MIRR

Modified Internal Rate of Return, a financial measure used to assess the attractiveness of investments by accounting for the cost of borrowing and reinvestment rates.

Cash Flows

The aggregate sum of money entering and exiting a business, notably affecting its cash flow.

WACC

Weighted Average Cost of Capital is an evaluation method for determining the cost of a company's capital, with each source of capital weighted based on its relative proportion.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows, given a specified rate of return.