A Taxpayer's Return Might Be Selected for Audit on the Basis

question 139

Short Answer

A taxpayer's return might be selected for audit on the basis of the score that the IRS
computes.

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Definitions:

Internal Rate

An abbreviation for Internal Rate of Return; a metric used in financial analysis to estimate the profitability of potential investments.

Net Present Value

A calculation used to assess the profitability of an investment by determining the difference between the present value of cash inflows and outflows.

Incremental Cash Flows

Additional cash flows from taking on a new project, crucial for analysis in capital budgeting decisions to determine a project's potential profitability.

Capital Budgeting

Analysis techniques concerned with justifying money spent on long-term assets and projects.