A Corporation ________

question 132

Multiple Choice

A corporation ________.

• A) must use the straight-line depreciation method for tax purposes and double declining depreciation method financial reporting purposes
• B) can use straight-line depreciation method for tax purposes and MACRS depreciation method financial reporting purposes
• C) can use different depreciation methods for tax and financial reporting purposes
• D) must use different depreciation method for tax purposes, but strictly mandated depreciation methods for financial reporting purposes

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Definitions:

Yield To Maturity

The total return expected on a bond if held until its maturity date, accounting for its current price, interest payments, and face value.

Maturity

The date on which a financial instrument (e.g., bond, loan) reaches its final installment, and the principal is due to be paid to investors.

Expectations Theory

A theory related to interest rates stating that the long-term interest rates are geometric averages of present and future short-term interest rates, reflecting market assumptions about future rates.

Forward Rate

The agreed-upon interest rate for a financial transaction that will occur at a future date, often used in the context of foreign exchange or interest rates.