Which of the Following Statements About Tax Deferral Is True

question 4

Multiple Choice

Which of the following statements about tax deferral is true?

• A)The value of tax deferral increases as the taxpayer's discount rate for computing NPV decreases.
• B)Tax deferral is not an effective planning strategy if the taxpayer's marginal tax rate is stable over time.
• C)The greater the length of time that the payment of a tax is deferred,the less the tax costs in NPV terms.
• D)Both A and C are true.

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Definitions:

Persistent Complex Bereavement Disorder

A disorder characterized by an extended period of grief and mourning that disrupts daily functioning.

Acute Stress Disorder

Disorder similar to posttraumatic stress disorder but occurs within 1 month of exposure to the stressor and does not last more than 4 weeks; often involves dissociative symptoms.

General Anxiety Disorder

A mental health disorder characterized by excessive, uncontrollable worry about everyday things, disproportionately to the actual source of worry.

Anxiety Disorders

A category of mental health disorders characterized by significant and persistent fear, anxiety, and related behavioral disturbances.