Which of the Following Would Be Most Likely to Occur

question 73

Multiple Choice

Which of the following would be most likely to occur in the year after Congress, in an effort to increase tax revenue, passed legislation that forced companies to depreciate equipment over longer lives? Assume that sales, other operating costs, and tax rates are not affected, and assume that the same depreciation method is used for tax and stockholder reporting purposes.

• A) Companies' reported net incomes would decline.
• B) Companies' net operating profits after taxes (NOPAT)would decline.
• C) Companies' physical stocks of fixed assets would increase.
• D) Companies' net cash flows would increase.
• E) Companies' cash positions would decline.

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Definitions:

Cholecystokinin

A hormone secreted by cells in the small intestine that stimulates the digestion of fat and protein.

Endocrine Cells

Cells that release hormones directly into the bloodstream to regulate body functions.

Small Intestine

A part of the digestive system where most of the digestion and absorption of nutrients and minerals from food takes place.

Chymotrypsinogen

Chymotrypsinogen is an inactive precursor (zymogen) of the digestive enzyme chymotrypsin, which is produced by the pancreas.