A Tax Shield Is Equal to the Reduction in a Firm's

question 39

Multiple Choice

A tax shield is equal to the reduction in a firm's:

• A) total tax liability resulting from a tax deductible expense.
• B) taxable income resulting from depreciation.
• C) taxable income resulting from a decrease in long-term debt.
• D) net income caused by depreciation.

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Definitions:

Mortality

The state of being subject to death.

Age

The length of time that a person has lived or a thing has existed.

Ethnicity

A category of people identified with each other through a shared heritage, culture, language, or common ancestry.

Biomedical Model

A system of medicine that emphasizes the diagnosis and treatment of disease through the application of scientific principles.