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bija089 [108]
3 years ago
8

If the tax laws were changed so that $0.50 out of every $1.00 of interest paid by a corporation was allowed as a tax-deductible

expense, this would probably encourage companies to use more debt financing than they presently do, other things held constant. True False
Business
1 answer:
Nastasia [14]3 years ago
5 0

Answer: False

Explanation:

Interest paid by Corporations on debts are already a tax deductible expense. If laws were changed allowing $0.5 out of every $1.00 to be tax deductible, that would mean that $0.5 would still have to be paid tax on. That would mean that Corporations now have to pay more taxes because current tax laws allow for every $1 of interest (100%) to be tax deductible.

It is therefore unlikely that Corporations would borrow more.

If you require any clarification do react or comment.

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The equation for problem above is:
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But the question is "at <span>least" $800.50 so the final answer is

</span>x \geq 3752.08<span>
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2 years ago
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