Which of the Following Statements About Tax Deferral Is True

question 69

Multiple Choice

Which of the following statements about tax deferral is true?

• A) The value of tax deferral increases as the taxpayer's discount rate for computing NPV decreases.
• B) Tax deferral is not an effective planning strategy if the taxpayer's marginal tax rate is stable over time.
• C) The greater the length of time that the payment of a tax is deferred, the less the tax costs in NPV terms.
• D) The value of tax deferral increases as the taxpayer's discount rate for computing NPV decreases and the greater the length of time that the payment of a tax is deferred, the less the tax costs in NPV terms.

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Definitions:

Environmental Influences

Environmental influences involve external factors and conditions that impact an individual's physical, psychological, and social development.

Sensitive Period

A point in development when organisms are particularly susceptible to certain kinds of stimuli in their environments, but the absence of those stimuli does not always produce irreversible consequences.

Synaptic Pruning

The process during brain development where extra neurons and synaptic connections are eliminated to increase the efficiency of neuronal transmissions.

Neurons

Specialized cells of the nervous system that transmit signals throughout the body; key components in the function of the brain, spinal cord, and peripheral nerves.