If a Few Intermediate Cash Flows in Valuing a Stream

question 16

Essay

If a few intermediate cash flows in valuing a stream of cash flows are zero can we delete those points on the timeline and squeeze the timeline to show only nonzero cash flows?

---

Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), showing the fraction of income that is paid in taxes.

Licensing Fees

Payments made by a user to an owner for the right to use intellectual property, such as patents, trademarks, or copyright material.

Ability-To-Pay Principle

A principle of taxation asserting that taxes should be levied according to an individual’s or entity’s capacity to pay.

Federal Employees

Individuals who work for the government of a federal state and are often subject to specific employment and benefits regulations.