Based on Samuel's Completed Tax Return,what Advice Would You Give

question 76

Multiple Choice

Based on Samuel's completed tax return,what advice would you give him to lower his tax liability for 2015?

• A)He should take the computer classes in 2015.
• B)He should sell his stock.
• C)He should increase his contributions to the 401(k)plan at work.
• D)He should get a roommate and claim him as a dependant.
• E)Both A and C are good advice.

---

Definitions:

Working Capital

is the difference between a company's current assets and current liabilities, indicating its short-term financial health.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, reflecting its expected worth in secondary markets.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Incremental Cost Approach

A method that analyzes the financial information relevant to a decision by focusing on the additional or incremental costs involved.