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Basic Question 5 of 10
Tax credits and withholding tax on dividends can cause differences between:
B. the statutory tax rate and the cash tax rate.
C. the cash tax rate and the effective tax rate.
A. the statutory tax rate and the effective tax rate.
B. the statutory tax rate and the cash tax rate.
C. the cash tax rate and the effective tax rate.
User Contributed Comments 2
| User | Comment |
|---|---|
| tpraturi | Tax credits, withholding taxes on dividends, adjustments from previous years tax returns, expenses Not deductible for tax purposes are some of the reasons for difference between Statutory tax rate and Effective tax rate |
| CFAJ | Statutory tax rate = legally imposed tax rate Cash tax rate = tax expense/NI before tax Effective tax rate = tax expense / NI before tax |
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Learning Outcome Statements
evaluate whether economies of scale are present in an industry by analyzing operating margins and sales levels;
demonstrate methods to forecast cost of goods sold and operating expenses;
demonstrate methods to forecast nonoperating items, financing costs, and income taxes;
CFA® 2024 Level II Curriculum, Volume 2, Module 17.