Which of the following statements about different tax rates over time is false?
A) A 5% increase in the tax rate for year 10 has less effect on NPV than a 5% increase in the tax rate for year 4.
B) Future tax rates used in NPV calculations are estimates because Congress can change the statutory rates every year.
C) A NPV calculation must assume a constant tax rate for all future periods.
D) A firm's future tax rate may change because of increases or decreases in future taxable income.
Correct Answer:
Verified
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