Which of the Following Is an Example of a Tax

question 145

Multiple Choice

Which of the following is an example of a tax following the benefits principle?
i.sales taxes on gasoline used to fund road maintenance projects
ii.federal income tax used to fund food stamps for poorer households
iii.property taxes used to finance public education

• A) i only
• B) ii only
• C) iii only
• D) ii and iii
• E) i, ii, and iii

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Definitions:

Cash Generated

The amount of money produced by a company's normal business operations after accounting for operational expenses and working capital.

Additional Funds Needed

Estimated funds required beyond what is currently available to the business to finance projected growth.

Payout Ratio

A financial metric used to measure the percentage of earnings paid to shareholders in dividends, indicating how much money a company is returning to shareholders versus reinvesting.

AFN Equation

Additional Funds Needed equation, a financial formula used to estimate the additional amount of funding a firm would require to support its increased level of sales.