Which of the Following Types of Income Is (Are) Excludable

question 180

Multiple Choice

Which of the following types of income is (are) excludable from federal income taxation?

• A)Income from a car pool
• B)Compensatory damages in physical injury cases
• C)Life insurance benefits received
• D)All of these

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Definitions:

Net Present Value

This signifies the net difference in present value terms of cash received versus cash paid out over an outlined time interval.

Internal Rate of Return

The discount rate at which the net present value of all cash flows (both positive and negative) from a project or investment equals zero.

Decision Rule

A guideline or criterion that aids in making choices between alternative courses of action.

Net Present Value (NPV)

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period, used for assessing profitability of investments.