Sally Is a Single Individual

question 78

Multiple Choice

Sally is a single individual.In 2016,she receives $10,000 of tax-exempt income in addition to her salary and other investment income of $100,000.Sally's 2016 tax return showed the following information:
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Which of the following statements concerning Sally's tax rates is (are) correct?
I.Sally's average tax rate is 19.4%.
II.Sally's average tax rate is 25.0%.
III.Sally's marginal tax rate is 25%.
IV.Sally's marginal tax rate is 28%.
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• A)Statements I and III are correct.
• B)Statements I and IV are correct.
• C)Statements II and III are correct.
• D)Statements II and IV are correct.
• E)Only statement IV is correct.

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Definitions:

Public Trading Companies

Corporations whose shares are listed and traded on public stock exchanges, making their ownership publicly accessible.

Adequate Capital

Sufficient funds required by a business to finance its operations and meet its obligations without facing financial distress.

Bank Run

A situation where a large number of a bank's customers try to withdraw their deposits simultaneously because they believe the bank might fail.

Canadian Deposit Insurance Corporation (CDIC)

A federal crown corporation in Canada that provides deposit insurance to protect the deposits made by consumers in member financial institutions in case of their failure.