The Investment Tax Credit

Multiple Choice

The investment tax credit:

A) enables a firm to deduct a certain proportion of each dollar spent on capital goods from its profits.
B) enables a firm to deduct a certain proportion of each dollar spent on capital goods from its tax bill.
C) reduces the corporate tax rate in proportion to each dollar spent on capital goods.
D) allows a firm to count a certain proportion of each dollar spent on capital goods as depreciation expense.