Which of the Following Would Be Most Likely to Occur

question 7

Multiple Choice

Which of the following would be most likely to occur in the year after Congress, in an effort to increase tax revenue, passed legislation that forced companies to depreciate equipment over longer lives? Assume that sales, other operating costs, and tax rates are not affected, and assume that the same depreciation method is used for tax and stockholder reporting purposes.

• A) companies' reported net incomes would decline.
• B) companies' net operating profits after taxes (nopat) would decline.
• C) companies' physical stocks of fixed assets would increase.
• D) companies' net cash flows would increase.
• E) companies' cash positions would decline.

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Definitions:

Cognitive

Related to the mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Physiological

Pertains to the functions and activities of living organisms and their parts, including all physical and chemical processes.

Penile Erection

The physiological process resulting in the increased blood flow to the penis, causing it to become rigid and elongated.

Clitoris Swelling

refers to the engorgement of the clitoris, often as a result of sexual arousal, which can increase sensitivity and pleasure.