When Their Baby Was Ready to Head Off to College,the

question 9

Multiple Choice

When their baby was ready to head off to college,the beleaguered parents pulled out the college folder from their file cabinet and added up the cost of putting their first child through college from 1995-2000.The mother whimpered as she factored in the rising cost of tuition,fees,books,and inflation by multiplying the total by 2.5.The father felt a searing pain go through his chest as he saw the total,knowing full well that their cost estimation approach,called:

• A)An order of magnitude estimate,was highly accurate.
• B)Parametric estimation,was highly accurate.
• C)Feasibility estimation,was highly accurate.
• D)Definitive estimation,was highly accurate.

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Definitions:

Taxable Income

The portion of income that is subject to taxation after all allowances, deductions, and exemptions are factored in.

Total Tax

The sum of all the taxes levied by different levels of government on an individual or business.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the impact of an additional dollar of income on the amount of taxes owed.

Taxable Income

The amount of income that is subject to taxes, after all deductions and exemptions have been factored in.