The Deferred Model has all of the following characteristics except for
A)only after-tax dollars are invested.
B)the earnings on the investment are not taxed annually.
C)the accumulated earnings are taxed at the end of the investment horizon.
D)the Deferred Model will not outperform the Current Model given equal BTRORs and constant tax rates.

Question

Quizplus · Accepted Answer

All the other statements are true about the Deferred Model, but it is not necessarily true that it will not outperform the Current Model given equal before-tax rates of return (BTRORs) and constant tax rates. The relative performance will depend on the specific details of the investment and tax circumstances.

The Deferred Model Has All of the Following Characteristics Except