Question

An investment tax credit results in?

1) a decrease in the cost of investment
2) an increase in the cost of investment
3) no change in the cost of investment
4) cannot be determined without additional information

Answer 1

An investment tax credit results in a decrease in the cost of investment.

Step-by-step explanation:

An investment tax credit results in a decrease in the cost of investment. When the government offers a tax credit for investments, it reduces the amount of taxes that businesses have to pay on their investment income. This effectively lowers the overall cost of investment, making it more attractive for businesses to make new investments.