Refer to the Information Provided in Table 19 -Refer to Table 19

question 241

Multiple Choice

Refer to the information provided in Table 19.6 below to answer the question(s) that follow.
Table 19.6 $$\begin{array} { c c c c } \text { Total Income}&\text { Total Taxes } & \begin{array} { c } \text { Average Tax } \\\text { Rate }\end{array} & \begin{array} { c } \text { Marginal Tax } \\\text { Rate }\end{array} \\\hline \$ 20,000 & \$ 2,000 & & \\\$ 40,000 & \$ 4,000 & & \\\$ 60,000 & \$ 6,000 & & \\\$ 80,000 & \$ 8,000 & & \\\hline\end{array}$$
-Refer to Table 19.6. The tax rate structure in this example is

• A) proportional.
• B) progressive.
• C) regressive.
• D) marginal.

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Definitions:

Liquidity Ratios

The two ratios—current ratio and acid test ratio—which measure a company’s ability to pay off short-term debts.

Debt Management

The process of overseeing and controlling an individual's or organization's debt load through various strategies and planning.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (or assets, liabilities, and equity) is represented as a proportion of the total account.

Net Income

The total earnings of a company after accounting for all expenses and taxes; also known as net profit.