If a Firm Pays Taxes,which One of These Will Reduce

question 64

Multiple Choice

If a firm pays taxes,which one of these will reduce net income but increase cash flow?

• A) Depreciation expense
• B) Income taxes
• C) Cash sales
• D) Interest expense

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Definitions:

Target Return Pricing

A pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments; designed to produce a specific return on investment, usually expressed as a percentage of sales.

Profit Goal

A financial objective set by a company, aiming for a specific amount of profit over a certain period.

Supply Costs

The expenses incurred to obtain the goods or materials needed for the production of products or services.

Demand Costs

The expenses associated with the demand for goods or services, including production and marketing costs.