Table 12-5 -Refer to Table 12-5.What Is the Approximate Average Tax Rate

question 155

Multiple Choice

Table 12-5
-Refer to Table 12-5.What is the approximate average tax rate for a person who makes $130,000

• A)30%
• B)40%
• C)50%
• D)60%

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Definitions:

EBIT-EPS Analysis

A tool used in financial analysis to determine the impact of leverage on a company's earnings per share (EPS) by holding earnings before interest and taxes (EBIT) constant.

Leverage Levels

The degree to which a business or investor is utilizing borrowed money.

EPS

Earnings Per Share, a company's profit divided by its number of outstanding shares of common stock, indicating how much money each share earns.

EBIT

The measure known as Earnings Before Interest and Taxes determines a company's profit levels by excluding interest and tax-related expenses.