What Rate Should Be Used When Calculating the After-Tax Future

question 18

Multiple Choice

What rate should be used when calculating the after-tax future value of investments with a constant rate of return that is taxed annually?

• A) annual before-tax rate of return
• B) annual after-tax rate of return
• C) marginal tax rate
• D) preferential tax rate
• E) average tax rate

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Definitions:

Fixed-Ratio Schedule

A reinforcement schedule in behavioral psychology where a response is reinforced only after a specified number of responses have been made.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, encouraging the repetition of desired behaviors.

Set Number

In mathematics, a concept referring to the count or quantity of distinct elements in a set.

Behaviors

Actions or reactions of an individual in response to external or internal stimuli.