Explain Why the Marginal Tax Rate,rather Than the Average Tax

question 92

Essay

Explain why the marginal tax rate,rather than the average tax rate,is used when computing the cash flows from a proposed new project.

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Definitions:

Field of Experience

The background, knowledge, perceptions, and understanding that individuals or groups bring to a communication situation, influencing their interpretation of messages.

Shared Understanding

A condition wherein all members of a group or team have a common and consistent comprehension of information, objectives, or tasks.

Psychographics

The study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research.

Communication Process

The sequence of steps through which information is transmitted from a sender to a receiver, involving encoding, medium selection, decoding, and feedback.