Question: In financial decision making, which is most important: the average or the marginal tax rate? A. average, because that is what is paid on an

In financial decision making, which is most important: the average or the marginal tax rate?

A. average, because that is what is paid on an additional dollar earned, and thus impacts your incentive to earn that additional dollar

B. marginal, because that is what is paid on an additional dollar earned, and thus impacts your incentive to that additional dollar

C. average, because, by definition, marginal is small

D. marginal, because, by definition marginal is small

E. neither average or marginal is important, because business people are not concerned about after tax cash flows

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