Peete Corporation Is Subject to Franchise Tax in State Z

question 151

Multiple Choice

Peete Corporation is subject to franchise tax in State Z.The tax is imposed at a rate of 2% of the taxpayer's net worth that is apportioned to the state by use of a two factor (sales and property equally weighted) formula.The property factor includes real and tangible personal property,valued at historical cost at the end of the taxable year.
Sixty percent of Peete's sales are attributable to Z,and $200,000 of the cost of Peete's tangible personal property is located in Z.
Determine the Z franchise tax payable by Peete this year,given the following end-of-the year balance sheet.

• A)$8,000.
• B)$4,800.
• C)$3,280.
• D)$2,050.

---

Definitions:

Revealed Preferences

A theory in economics that infers consumer preferences based on the observation of consumer behavior and choices under constraint.

Bundle

A collection of goods or services sold as a single package, often at a discounted price compared to purchasing each item separately.

Revealed Preferred

A concept in microeconomic theory suggesting that consumers' preferences can be determined by observing their choices and behaviors in various situations.

Commodity Bundle

A set of goods or services that are considered together, often used in the context of consumer choice and budget constraints.