Identify Which of the Following Statements Is True

question 23

Multiple Choice

Identify which of the following statements is true.

• A) If a C corporation does not distribute its income to its shareholders annually, double taxation cannot occur.
• B) C corporation operating losses are deductible by the individual shareholders.
• C) Capital losses incurred by a C corporation can be used to offset the corporation's ordinary income.
• D) All of the above are false.

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Definitions:

Net Present Value

The gap between what cash inflows and cash outflows are worth now, calculated over a specified period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity.

Incremental Cost Approach

A decision-making process focusing on the additional costs and benefits associated with a particular business decision.

Incremental Cost Approach

The method of analyzing the financial information needed for decision making by considering only the costs and benefits that change due to the decision.