If Tax Rates Are Increasing

question 80

Multiple Choice

If tax rates are increasing:

• A)taxpayers should accelerate income.
• B)taxpayers should defer deductions.
• C)taxpayers should defer income.
• D)you need more information to make a recommendation.
• E)None of the choices are correct.

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Definitions:

ROE

Return on Equity, a measure of a company's profitability that reveals how much profit a company generates with the money shareholders have invested.

Inventories

Assets held for sale in the ordinary course of business, or in the process of production for such sale, or in the form of materials to be consumed in the production process.

Basic Earning Power

A measure of a firm's profitability and efficiency, calculated as earnings before interest and taxes divided by total assets.

Debt Ratio

The ratio of total debt to total assets, it measures the percentage of funds provided by investors other than preferred or common shareholders. Also called debt-to-assets ratio.