Which of the Following Statements Is Most Correct

question 116

Multiple Choice

Which of the following statements is most correct?

• A)Corporations are allowed to exclude 70% of their interest income from corporate taxes.
• B)Corporations are allowed to exclude 70% of their dividend income from corporate taxes.
• C)Individuals pay taxes on only 30% of the income realized from municipal bonds.
• D)Individuals are allowed to exclude 70% of their interest income from their taxes.
• E)Individuals are allowed to exclude 70% of their dividend income from their taxes.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted; a measure of profitability.

Total Cost of Goods Sold

The sum of all costs directly involved in producing or purchasing products sold by a company during a given period.

High-low Method

A technique used to estimate fixed and variable components of costs by analyzing the highest and lowest levels of activity.