Which of the Following Is Not True

question 7

Multiple Choice

Which of the following is not true?

• A)Because all activities of a corporation are considered to be business activities, a corporation cannot have a nonbusiness bad debt.
• B)The proprietorship, partnership, and S corporation pass through to individuals, partners, and shareholders all items of income, deduction, gain, loss, or credit for Federal income tax purposes.
• C)Unlike individuals, a corporation's charitable deduction is limited to 10 percent of taxable income figured before certain deductions.
• D)A corporation is allowed to deduct 70 percent of dividends paid to shareholders provided that it is a taxable domestic corporation.
• E)By making a proper election on its tax return for the year of the loss, a corporation may forgo the two-year carryback and, instead, carry its net operating loss forward up to 20 years.

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Definitions:

Isocost Line

A diagram representing every possible mix of inputs that can be acquired for a specific total expenditure.

Cost Of Capital

The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.

Cost Of Labor

The total amount incurred by a business to compensate its employees, including wages, benefits, and taxes.

Cost Of Capital

The rate of return a company must earn on its project investments to maintain its market value and attract funds.