Which of the Following Statements Is NOT True of the Tax

question 103

Multiple Choice

Which of the following statements is NOT true of the Tax Cut and Jobs Act (TCJA) of 2017?

• A) The act permanently lowers corporate taxes from a progressive schedule to a flat 21% starting in 2018.
• B) The act limits the deductibility of net interest expense that exceeds 21% of a firm's adjusted taxable income starting in 2018.
• C) Neither A or B is false.
• D) Both A and B are false.

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Definitions:

Liquidity Measures

Financial metrics used to determine an entity's ability to pay off its short-term obligations with available assets without significant loss.

Short-Term Obligations

Financial liabilities or debts that are due to be paid within a short period, typically within a year.

Financial Ratios

Quantitative measures derived from a company's financial statements used to assess its financial health, performance, and stability.

Liquidity Ratios

Financial metrics used to determine a company's ability to pay off its short-term debts with its liquid assets, critical for assessing financial health.