A Test Is Conducted to Compare Three Difference Income Tax

question 56

Multiple Choice

A test is conducted to compare three difference income tax software packages to determine whether there is any difference in the average time it takes to prepare income tax returns using the three different software packages.Ten different people's income tax returns are done by each of the three software packages and the time is recorded for each.Given this format and testing using an alpha level equal to 0.05,the critical value associated with the primary hypothesis test is:

• A)3.555.
• B)2.456.
• C)19.385.
• D)4.256.

---

Definitions:

Tax Rate

The percentage of income or value that is collected by the government as tax.

MACRS Depreciation

A method of depreciation in the U.S. that allows for a faster write-off of assets under the tax code.

Incremental Annual Cash Flow

The additional cash flow generated by a company from taking on a new project, calculated as the difference between the project's cash inflows and outflows.

Tax Rate

The rate at which taxes are levied on the income of a person or business.