Why should the effective tax rate be evaluated when assessing earnings?

(a) It is important to understand if earnings have increased due to tax techniques as opposed to positive changes in core operations.

(b) Effective tax rates are irrelevant because they are mandated by law.

(c) Effective tax rates do not include the effects of foreign taxes.

(d) Net operating losses allow a firm to change its effective tax rates for each of the five years prior to the loss.