Which of the Following Statements About Tax Deferral Is True

question 4

Multiple Choice

Which of the following statements about tax deferral is true?

• A)The value of tax deferral increases as the taxpayer's discount rate for computing NPV decreases.
• B)Tax deferral is not an effective planning strategy if the taxpayer's marginal tax rate is stable over time.
• C)The greater the length of time that the payment of a tax is deferred,the less the tax costs in NPV terms.
• D)Both A and C are true.

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Definitions:

Stress Protection

Strategies or factors that shield individuals from the negative effects of stress.

External Locus

Refers to the belief that outside forces, rather than personal actions, control one's life circumstances.

Locus of Control

A psychological concept that refers to individuals’ beliefs about the extent to which their actions influence the rewards and consequences they experience.

Stable Worldview

A consistent and unchanging perspective or set of beliefs about the world and one's place within it.