Question: c. Describe how the changed tax rate assumption distorted the comparison of third-quarter net income for 1991 and 1992. d. Suggest two ways by which

c. Describe how the changed tax rate assumption distorted the comparison of third-quarter net income for 1991 and 1992.

d. Suggest two ways by which analysis can offset the distortion discussed in part

c. e. Assume that State Auto had estimated a tax rate of 17% for the first two quarters of 1992. (i) Compute the effect of that assumption on reported net in- come for those quarters. (ii) Discuss how that assumption would have affected the year-to-year comparison of operating results for the first two quarters.

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