Tax shield refers to a reduction in taxes created by:
A) a reduction in sales.
B) an decrease in interest expense.
C) non-cash expenses.
D) a project's incremental expenses.
E) opportunity costs.

Question

Quizplus · Accepted Answer

Non-cash expenses, such as depreciation and amortization, reduce taxable income, thereby lowering the amount of taxes a company owes. This effect is known as a tax shield.

Tax Shield Refers to a Reduction in Taxes Created By