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- when multiplying companys tax rate with any firms accounting income , the result is always different with income tax expense . why ??The form of employees compensation ir relevant to tax deductibility of the firm true? or false?What major trends in taxation income sources will have an impact on the firm? What action has the firm taken in resposne to these trends?
- A company determines that it is more likely than not that a portion of a deferred tax asset will not be realized. Due to the value of the beginning of the period balance, this determination caused a valuation allowance account to decrease during the current period. This situation will cause Income Tax Expense to decrease. O True O FalseA reduction in the statutory tax rate would most likely benefi t the company’s:A . income statement and balance sheet.B . income statement but not the balance sheet.C . balance sheet but not the income statement.Which of the following is CORRECT? Select one: a. When calculating the cost of debt, a company needs to adjust for taxes, because interest payments are deductible by the paying corporation. b. When calculating the cost of preferred stock, companies must adjust for taxes, because dividends paid on preferred stock are deductible by the paying corporation. c. Because of tax effects, an increase in the risk-free rate will have a greater effect on the after-tax cost of common stock as measured by the CAPM. d. Higher flotation costs reduce investors' expected returns, and that leads to a reduction in a company's WACC. e. All of the above are correct. Which of the following is CORRECT? Select one: a. If the NPV of a project is negative, the IRR for the project must also be negative. b. A project's MIRR can never exceed its IRR. c. If a project with normal cash flows has an IRR less than WACC, the project must have a positive NPV. d. If Project 1's IRR exceeds Project 2's IRR, then 1 must…
- Under IFRS: a. “probable” is defined as a level of likelihood of at least slightly more than 60%. b. a company should reduce a deferred tax asset when it is likely that some or all of it will not be realized by using a valuation allowance. c. a company considers only positive evidence when determining whether to recognize a deferred tax asset. d. deferred tax assets must be evaluated at the end of each accounting period.Discuss why the after-tax cost of equity (common or preferred) does not have to be adjusted by the marginal income tax rate for the firm.When certain expenditures result in tax credits that directly reduce taxes, the companywill most likely record:A . a deferred tax asset.B . a deferred tax liability.C . no deferred tax asset or liability.
- When financial income is higher than taxable income and no permanent differences, the company most probably will: Group of answer choices report a higher income tax expense. report a lower income tax expense. report an income tax benefit. report a deferred tax asset.Which cost flow assumption must be used for financial reporting if it is also used for tax reporting? Multiple Choice LIFO. FIFO. Weighted-average. Any assumption can be used regardless of the tax reporting.How important is valuing inventory for financial statement purposes to a company’s bottom line (net income). Which method gives a company the best tax advantages? When would a company prefer to show more net income vs. tax savings?
