Which of the Following Statements About Implicit and Explicit Taxes

question 74

Multiple Choice

Which of the following statements about implicit and explicit taxes is false?

• A)The amount of implicit tax on an investment depends on the owner's marginal tax rate.
• B)The taxpayer pays an explicit tax to the taxing jurisdiction.
• C)An investment yielding ordinary income taxed at the regular tax rates should not have an implicit tax.
• D)None of the above is false.

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Definitions:

Ownership Percentage

The fraction of an investment or business enterprise owned by an individual or entity, usually expressed as a percentage.

Bud Ltd.

is not a universally recognized key term; it might refer to a specific entity or business and its significance might vary by context. NO.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not control the company outright.

Consolidation Method

An accounting technique used for combining the financial statements of subsidiary companies with the parent company.