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1. The accrual method of accounting is permitted by the Internal Revenue Code if:
a. it is used only to account for inventories.
b. it clearly and accurately reflects the taxpayer's income.
c. it is required to be used in conjunction with the cash method.
d. None of the above.
2. The tax law has been used as a mechanism to:
a. stimulate the economy.
b. show political favoritism.
c. control monetary policy.
d. Both A and B.
e. Both A and C.
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Bosio Inc.'s perpetual preferred stock sells for $97.50 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's..
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