Mr Dodd Resides in a State with a 6% Sales

question 76

Multiple Choice

Mr. Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy a sailboat and paid that state's 4% sales tax. Which of the following statements is true?

• A) Mr. Dodd's use tax liability to his home state equals 2% of the purchase price of the furniture.
• B) Mr. Dodd does not owe a use tax to his home state.
• C) Mr. Dodd's use tax liability to his home state equals 6% of the purchase price of the furniture.
• D) None of the above is true.

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Definitions:

EVA

Economic Value Added, a measure of a company's financial performance based on the residue wealth calculated by deducting its cost of capital from its operating profit.

Investor-supplied Capital

Funds provided by investors to a company, used for business activities and growth.

Operating Income

Revenue from a company’s core business operations, excluding deductions of expenses like cost of goods sold, salaries, and other operating expenses.

Market and Book Values

Market value is the current price at which an asset or company can be bought or sold, while book value is the value of an asset according to its balance sheet account balance.