Which of the following describes examples of other tax shields?

The correct choice refers to depreciation and investment tax credits as examples of other tax shields because they are mechanisms that reduce taxable income. Tax shields are expenses that can be deducted from taxable income, thus lowering the overall tax liability of a business.

Depreciation allows a company to allocate the cost of tangible assets (like buildings or machinery) over their useful lives, which provides a non-cash expense that can lower taxable income each year. This means that as the company recognizes depreciation as an expense, it reduces the amount of profit subject to taxation.

Investment tax credits provide a direct reduction in taxes owed based on the level of investment the company makes in certain capital assets. This encourages companies to invest in equipment or properties, ultimately providing a tax benefit which, unlike a deduction that reduces taxable income, directly decreases the amount of tax payable.

The other options do not accurately capture the concept of tax shields as they relate to taxation. Interest payments, while deductible, are specifically related to debt financing rather than representing broader forms of tax shields. Legal fees and administrative costs may be necessary business expenses but do not constitute tax shields in the context of reducing income tax. Cash sales and earnings forecasts pertain to revenue and financial predictions, respectively, which do not directly influence taxable income