Healy, Inc

question 129

Multiple Choice

Healy, Inc., reports an effective tax rate in its income tax footnote of 14%. The only reconciling item with regard to the hypothetical tax at 35% is a valuation allowance reversal of negative 21%. Which of the following statements is true concerning comparing Healy, Inc.'s effective tax rate with its competitors, all of whom have an effective tax rate between 32 and 36%?

• A)Healy Inc., is managing its tax burden in a more efficient manner than its competitors.
• B)Healy Inc., structural effective tax rate is actually quite close to its competitors.
• C)Healy Inc., earned more cash profits because of its lower effective tax rate.
• D)Healy Inc., is likely to be engaged in tax shelter activities.

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Definitions:

Psychotic Disorder

A mental disorder characterized by a disconnection from reality, which can include symptoms such as delusions and hallucinations.

First-Degree Murder

A legal term for a murder that is premeditated and carried out with malice aforethought, indicating planning and intent to kill.

Remorse

A deep feeling of guilt or regret for wrongs one has done.

Not Criminally Responsible

A legal defense asserting that at the time of committing a crime, the person was suffering from a mental disorder that rendered them unable to understand the nature or wrongness of their actions.