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As Seen on an Income Statement

Question 1

Multiple Choice

As seen on an income statement,


A) interest is deducted from income and increases the total taxes incurred.
B) depreciation reduces both the pretax income and the net income.
C) depreciation is shown as an expense but does not affect the taxes payable.
D) the tax rate is applied to the earnings before interest and taxes when the firm has both depreciation and interest expenses.
E) both dividends and interest expense reduce corporate income taxes.

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