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When a company's interest payment Blank______, the company's tax bill Blank______.
increases; increases
stays the same; increases
increases; decreases
decreases; decreases
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- What will happen to a company's tax bill if interest expense is deducted? Multiple choice question. The company's tax bill will increase. The company's tax bill will decrease. The company's tax bill will not be affected. The company's tax bill for the next year will be affected.3. Dividends are considered doubled taxed, first to the company,second to the shareholders. T/F 4. Annuities can help a firm plan for the retirement payouts of theiremployees. T/FWhich of the following statements is/are true? O In the case of flat-rate write-offs on receivables, the sales tax must also be corrected. All deposits are income effective. O If a company's profit is to be reported as high, administrative costs are taken into account when determining the production costs. O Compared to straight-line depreciation, declining-balance depreciation means that profits tend to be higher in the future.
- Why do companies accelerate depreciation on their tax return but often use slower depreciation rates on their financial statements? a. to avoid taxes b. to postpone taxes c. to improve earnings d. to improve long term cashflowPlease paraphrase the ''Income before and after tax'' and ''Net Income'' below. Should be the same length as the original one.As a company, to minimize the present worth of taxes paid to the federal government, use longest MACRS recovery period. true or false?
- 1) The effect on the FICA Taxes Payable Account when a payment is made is called: a. Increase with a, CRb. Increase with a, DRc. Decrease with a DRd. Decrease with a, CR 2) From the options below, which of the following statements is true? a. Payroll Tax Expense increases on the credit side of the accountb. FICA Medicare Payable increases with a creditc. Federal Income Tax Withholding Payable decreases with a creditd. Employee Payroll Taxes withheld are recorded in Payroll Tax Expense 3) From the options below, identify the one that is NOT an example of internal control proceduresthat help prevent payroll fraud. a. Require mandatory vacations.b. Outsource Payroll Administration.c. Conduct periodic unannounced audits.d. Make sure only one person handles payroll functions. 4) Sally Carson has cumulative earnings of $89,900 and earns $6,500 during the current payperiod. If the FICA rate is 4.2% for Social Security, with a limit of $106,800, and 1.45% forMedicare, applied to all earnings,…Corporate Finance If a company is profitable and pays taxes, why is the cost of its debt rd(1-t), lower than thecost if the company did not pay taxes rd? i.e. why has the formula been multiplied by (1-t)?A firm has decided to switch from FIFO to LIFO. Ceteris paribus (all things being equal), what impact will the change in accounting have on the following variables? Assume an inflationary environment. Net profit will: OA increase OB decrease OC not change OD. cannot determine
- 5 Which of the following would not affect a company's net income? A change in the company's income taxes Changing the selling price of a company's product Paying a dividend to stockholders Advertising a new product1. Subsidy on inputs 2. Higher interest rates on treasury bonds3. Higher business tax Identify whether each number either: (Select one choice per number) (A) increase inflation(B) decrease inflation(C) does not directly affect economic growth or cannot be determinedWhich of the following is a disadvantage of long-term debt as a means of company financing? Group of answer choices Debtholders have preferential status in the event of a company being wound up. Tax relief is available on interest payments. Debt is often quicker to arrange compared to equity. The amount and timing of interest payments is predictable, making budgeting easier.
