Since financial decisions usually involve new cash flows or changes in existing ones, the relevanttax rate is the

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The marginal tax rate is the relevant tax rate when making financial decisions that involve new cash flows or changes to existing ones. This is because it represents the tax rate that will be applied to the next dollar of income earned or expense incurred. The average tax rate is not as relevant because it represents the total tax paid divided by total income and does not reflect the tax rate on incremental changes. The going-concern tax rate and CCA tax rate are not commonly used or relevant for most financial decisions.

Since Financial Decisions Usually Involve New Cash Flows or Changes