Which of the Following Would Be Most Likely to Occur

question 67

Multiple Choice

Which of the following would be most likely to occur in the year after Congress, in an effort to increase tax revenue, passed legislation that forced companies to depreciate equipment over longer lives? Assume that sales, other operating costs, and tax rates are not affected, and assume that the same depreciation method is used for tax and stockholder reporting purposes.

• A) Companies' reported net incomes would decline.
• B) Companies' net operating profits after taxes (NOPAT) would decline.
• C) Companies' physical stocks of fixed assets would increase.
• D) Companies' free cash flows would increase.
• E) Companies' cash positions would decline.

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Definitions:

Logical Analysis

The systematic examination of arguments and statements through reasoning to assess their validity and infer conclusions.

Abstract Thinking

The ability to think about objects, principles, and ideas that are not physically present, involving complex thought processes like analysis and synthesis.

Cognitive A-B-C Model

A psychological framework that helps to understand the relationship between an Activating event, Beliefs, and the Consequences of those beliefs, emphasizing the role of cognition in emotional and behavioral responses.

Antecedents

Antecedents are events or conditions that occur before a behavior, which may trigger or cue the behavior to occur in contexts of behavior analysis.