Use the Following to Answer Question

question 6

Multiple Choice

Use the following to answer question:
-(Table: Cost Data) Use Table: Cost Data.The average fixed cost of producing 2 purses is:

• A)$0.
• B)$50.
• C)$25.
• D)$2.

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Definitions:

Tax Shield

The reduction in income taxes that results from taking an allowable deduction from taxable income.

CCA Class

Refers to the classification system for capital cost allowance purposes in Canada, determining the rate at which assets can be depreciated for tax purposes.

Marginal Tax Bracket

The tax rate that applies to the final dollar of taxable income for a person or organization.

Erosion Cost

Costs that occur when a new project or investment negatively affects the revenues or profits of existing projects.