Which Reason Is Unlikely to Cause a Regular Corporation to Have

question 87

Multiple Choice

Which reason is unlikely to cause a regular corporation to have to pay AMT?

• A)A service-type of company with little inventory.
• B)A high level of investment in assets such as equipment and structures.
• C)Low taxable income due to a cyclical downturn, strong international competition, a low-margin industry, or other factors.
• D)Investment at low real interest rates, which increases the company's deductions for depreciation relative to those for interest payments.
• E)None of the above.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Prepaid Rent

An asset account that represents rent payments made in advance of the rental period.

Rent Expense

The cost incurred by renting property or equipment for business or personal use, typically recognized in accounting over the rental period.

Expected Life

The anticipated duration a fixed asset is likely to be useful in business operations before needing replacement.