As Long as a Firm Is near Its Target Capital

question 45

True/False

As long as a firm is near its target capital structure it will not have to concern itself with financial flexibility.

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Definitions:

Tax Depreciation

The deduction of a portion of the cost of a business asset from taxable income over the asset's useful life, as allowed by tax laws.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government, after all deductions and exemptions.

Charitable Contributions

Donations made to qualified organizations, often deductible from the donor's taxable income under specific conditions.

Book Net Income

The net profit or loss of a company as reported in its financial statements, calculated according to accounting principles rather than tax regulations.