Assume Congress Wishes to Encourage Healthy Eating and Is Considering

question 7

Multiple Choice

Assume Congress wishes to encourage healthy eating and is considering a deduction for broccoli purchases.In order to maximize the value of this tax deduction for taxpayers,Congress should provide for a

• A)miscellaneous deduction.
• B)deduction for AGI.
• C)deduction from AGI.
• D)All of the above would provide the same tax savings to taxpayers

---

Definitions:

Capital Budgeting

The process by which investors and managers decide which significant investments or projects to undertake, based on potential profitability.

Risk

The potential for loss, damage, or any other negative occurrence that may be avoided through preemptive action.

Probability Distributions

Mathematical functions that describe all the possible values and likelihoods that a random variable can take within a given range.

Cost of Capital

The cost of funds used for financing a business, calculated as the weighted average of debt and equity costs.