Which of the Following Statements Is Correct for a Firm

question 95

Multiple Choice

Which of the following statements is correct for a firm in which depreciation expense exceeds EBIT (Operating Income) ? The firm:

• A)will have a net loss.
• B)will have no income-tax liability.
• C)needs to lower its interest expense.
• D)can still have a positive net income.

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Definitions:

Negative Effects

Adverse or harmful outcomes resulting from a particular action or condition.

Actual Purpose

The genuine intention or primary objective behind an action, study, or project.

Deception

The act of misleading or tricking someone into believing something that is not true as part of a psychological experiment or study.

True Purpose

is the actual objective or intended goal behind an action, study, or endeavor, often as opposed to what is stated or apparent.