Zinc, Inc., reports an effective tax rate in its income tax footnote of 14%. The onlyreconciling item with regard to the hypothetical tax at 35% is a valuation allowancereversal of negative 21%. Which of the following statements comparing Zinc, Inc.'seffective tax rate with its competitors, all of whom have an effective tax rate between32% and 36%, is true?O a. Zinc, Inc.'s structural effective tax rate is actually quite closeto its competitors.O b. Zinc, Inc., is likely to be engaged in tax shelter activities.O c. Zinc, Inc., earned more cash profits because of its lowereffective tax rate.O d. Zinc, Inc., is managing its tax burden in a more efficientmanner than its competitors.O e. Zinc, Inc., is likely facing bankruptcy.

Step 1 The effective tax rate is the tax rate over the final taxable income which is assessed…

Zinc, Inc., reports an effective tax rate in its income tax footnote of 14%. The only reconciling item with regard to the hypothetical tax at 35% is a valuation allowance reversal of negative 21%. Which of the following statements comparing Zinc, Inc.'s effective tax rate with its competitors, all of whom have an effective tax rate betwee 32% and 36%, is true?

Zinc, Inc., reports an effective tax rate in its income tax footnote of 14%. The only reconciling item with regard to the hypothetical tax at 35% is a valuation allowance reversal of negative 21%. Which of the following statements comparing Zinc, Inc.'s effective tax rate with its competitors, all of whom have an effective tax rate betwee 32% and 36%, is true?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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