Exhibit 16-3 Income for Two Persons In Exhibit 16-3, If the Income Tax System Is Currently

question 10

Multiple Choice

Exhibit 16-3 Income for two persons $$\begin{array} { | l | r | } \hline \text { Name } & \text { Income } \\\hline \text { Meredith } & \$ 124,000 \\\text { Hillary } & \$ 45,000 \\\hline\end{array}$$ In Exhibit 16-3, if the income tax system is currently proportional, we know that:

• A) Meredith would probably prefer a progressive income tax system while Hillary would probably prefer a regressive income tax system.
• B) Meredith and Hillary would both probably prefer a regressive income tax system.
• C) Meredith and Hillary would both probably prefer a progressive income tax system.
• D) Meredith would probably prefer a regressive income tax system while Hillary would probably prefer a progressive income tax system.

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Definitions:

Payback Period

The amount of time it takes for an investment to generate an amount of income or cash flow to recover the cost of the investment.

Salvage Value

The projected sum an asset is expected to fetch at the end of its service life.

Cost Savings

The reduction in costs achieved through efficiency improvements, strategic purchase, or avoiding unnecessary expenses.

CCA Class

In Canadian taxation, a classification system for capital assets that determines the rate at which they can be depreciated.