Identify Which of the Following Statements Is True

question 61

Multiple Choice

Identify which of the following statements is true.

• A)When a new corporation joins an affiliated group, all of its income and expense items for the tax year, including the acquisition date, must be allocated between the separate tax return and consolidated tax return that are to be filed based on the number of days included in each of the two tax years.
• B)A consolidated return election may be revoked after 5 years.
• C)All members of a consolidated group must use the same tax year.
• D)All of the above are false.

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Definitions:

Independent Projects

Investment projects whose cash flows are not affected by the accept or reject decision for any other project, allowing for independent evaluation.

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments through calculating the rate of return where the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.

Payback Period

A rephrased definition: The duration needed to recover the initial expenditure on an investment through the cash flows it generates.