Which of the Following Is Not a Way That a Corporate

question 317

Multiple Choice

Which of the following is not a way that a corporate tax on the income of U.S. car companies will affect markets?

• A)The price of cars will rise.
• B)The wages of auto workers will fall.
• C)Owners of car companies (stockholders) will receive less profit.
• D)Less deadweight loss will occur since corporations are entities and not people who respond to incentives.

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Definitions:

Salvage Value

The projected sell-on value of a property when it reaches the end of its operational lifespan.

Internal Rate

Often referred to as Internal Rate of Return (IRR), it is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Payback Period

The duration required for an investment to produce a sum of money or cash value equal to the investment's cost.

Simple Rate

An interest calculation method where interest is calculated on the principal amount only, without compounding.