Holding All Other Variables Constant, an Increase in Net Income

question 114

Multiple Choice

Holding all other variables constant, an increase in net income can be caused by a decrease in:

• A)depreciation expense.
• B)the cost ratio.
• C)the tax rate.
• D)Both a and c
• E)a, b, and c are correct.

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Definitions:

Trading

The action or activity of buying and selling goods and services or financial instruments, often in financial markets.

Lenders

Individuals, institutions, or entities that provide funds to others with the expectation that the funds will be repaid, typically with interest.

Risk-Free Rate

The return on an investment with no risk of financial loss, often represented by the yield on government securities.

Earning Power

The ability of a business to generate net income consistently over time.