Which of the Following Statements About Tax Deferral Is True

question 77

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.
• E) are true.

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Definitions:

CFA

Chartered Financial Analyst, a professional designation given by the CFA Institute to finance and investment professionals.

Joint Conceptual Framework

A collaborative effort among accounting standards boards to establish a common conceptual foundation for the development of accounting standards.

IASB and FASB

The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) are organizations that establish and communicate standards of financial accounting and reporting.

Financial Reporting

Financial Reporting is the process of producing statements that disclose an organization's financial status to management, investors, and the regulatory authorities.