Which of the Following Statements About the Time Period Variable

question 46

Multiple Choice

Which of the following statements about the time period variable is false?

• A) If Congress replaced the current progressive income tax rates with a proportionate rate applying to all taxpayers, the time period variable would no longer be a factor in tax planning.
• B) The time period variable becomes more important as the taxpayer's discount rate for computing NPV increases.
• C) Tax planning strategies based on the time period variable must involve at least two different taxable years.
• D) Tax planning strategies based on the time period variable reflect the time value of money.

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Definitions:

Fair Value

An estimate of the price at which an asset or liability would be traded in a fair transaction between willing and knowledgeable participants.