If the MPS Is 0

question 231

True/False

If the MPS is 0.4 and t is 0.3, then the tax multiplier is about -1.03.

---

Definitions:

Discounted Values

Discounted values are the present values of future cash flows, calculated using a discount rate to account for the time value of money.

Present Values

The today's equivalent worth of a future money sum or cash flows, with a particular rate of return taken into account.

Net Cash Values

The amount of cash that could be received if a policy, such as life insurance, is surrendered to the company issuing the policy before its maturity or the insured event occurs.