Teal, Inc, Is a Private Foundation Which Failed to Distribute an an Adequate

question 30

Multiple Choice

Teal, Inc., is a private foundation which failed to distribute an adequate amount of income for the exempt purpose of Teal.Which of the following statements is correct?

• A)An excise tax in the form of an initial tax at the rate of 5% may be imposed on Teal.
• B)An excise tax in the form of an initial tax at the rate of 2.5% may be imposed on the foundation manager.
• C)An excise tax in the form of an additional tax at the rate of 100% may be imposed on Teal.
• D)An excise tax in the form of an additional tax at the rate of 50% may be imposed on the foundation manager.
• E)None of the statements is correct.

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Definitions:

Average Fixed Costs

The total fixed costs divided by the number of units produced, representing the fixed cost per unit of output.

Marginal Cost

The cost of producing one additional unit of a product or service.

Total Cost

The sum of all costs incurred by a business in producing goods or services, including both fixed and variable costs.

AVC

An alternative term for Average Variable Cost, reflecting the variable costs incurred per unit of output.