Indicate Whether Each of the Following Statements Is True or False

question 8

Short Answer

Indicate whether each of the following statements is true or false.
1. Short-term plans are more specific and detailed than long-term plans.
2. Short-term planning focuses on the operations of a business for the next two to three years.
3. A decision to lease equipment would be part of a company's capital budgeting process.
4. The master budget focuses on long-term objectives and goals.
5. The master budget normally covers a period of one quarter.

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Definitions:

Marginal Tax Rate

The percentage of an increase in income that is taxed away.

Average Tax Rate

The ratio of the total amount of taxes paid to the total taxable income.

Flat Tax

A tax system with a constant marginal rate, usually applied to individual or corporate income, where everyone pays the same percentage regardless of income level.

Income Taxes

Taxes levied by government on individuals' or corporations' income, where the tax rates can vary depending on the income level.