When Financial Managers Take Action to Minimize the Carrying Costs

question 91

Multiple Choice

When financial managers take action to minimize the carrying costs of current assets, they:

• A) are likely to maximize profits.
• B) also decrease unnecessary trading costs.
• C) may increase costs due to shortages.
• D)engage in the matching of maturities.

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Definitions:

Taxable Income

The portion of an individual's or business's income used to determine how much tax will be owed to the federal government.

Marginal Tax Rate

The percentage of tax applied to an individual's or entity's income for each additional unit of income.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government in a given tax year.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, typically imposing higher rates on those with higher incomes.