When Evaluating Project Cash Flows in a Financial Decision, __________

question 278

Multiple Choice

When evaluating project cash flows in a financial decision, __________.

• A) Taxes can generally be ignored since they are a non-cash expense.
• B) The financial manager should compute and use the marginal tax rate.
• C) The marginal tax rate and average tax rate are of equal importance.
• D) The financial manager should use the tax rate that is equal to the total tax liability divided by total taxable income.
• E) Taxes are irrelevant unless income for the firm is greater than zero.

---

Definitions:

Formal Operational

The final stage in Piaget's theory of cognitive development, marked by the ability to think abstractly and logically.

Concrete Operational

A stage in Piaget's theory of cognitive development, occurring from around 7 to 12 years, where children gain the ability to think logically about concrete events.

Abstractions

The process of considering something independently from concrete realities, specific objects, or actual instances.

Preoperational

A stage in Piaget's theory of cognitive development, from about 2 to 7 years of age, where children can use symbols and language but do not yet understand concrete logic.