One Difference Between Sales and Excise Taxes Is That

question 25

Multiple Choice

One difference between sales and excise taxes is that

• A)sales taxes are only applied at the state level, while excise taxes are only applied at the federal level.
• B)excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products.
• C)sales taxes are calculated as a percentage of the price paid, while excise taxes are levied on a per-unit basis.
• D)excise taxes are calculated as a percentage of the price paid, while sales taxes are levied on a per-unit basis.

---

Definitions:

Reinvested

Refers to the practice of using profits or dividends earned from an investment to purchase additional shares or units, thus compounding the investment's growth.

Cost of Capital

The minimum rate of return a company must earn on its investments to maintain its market value and attract funds.

Capital Rationing

The process of selecting the most profitable projects to invest in when funds are limited.

Capital Budgeting

Capital budgeting involves the process of deciding which long-term investments or projects a company should undertake, based on potential profitability and risk.