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Which incentive is the most common one used by localities to attract a production facility?
AA tax break on income, property, utilities, or payroll
BA promise that no rival firm may open in that area
CA guarantee of a fixed price for the finished goods
DAn agreement to buy the plant back after ten years
Answer & Solution
Correct answer: A. A tax break on income, property, utilities, or payroll
1. Incentives offered by countries, states, or cities can influence where a facility is put.
2. Tax breaks are the common form such incentives take.
3. A locality may reduce the taxes a firm pays on income, real estate, utilities, or payroll.
4. Local governments may also offer financial assistance or exemptions from certain regulations, but none of the other three options is an incentive any locality can offer.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 10 "Achieving World-Class Operations Management", section Local Incentives_
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