Multiple choice

1) In 2010, Trucking Inc. had $1,250,000 in revenues and $1,013,000 in expenses. What are the Average and Marginal Tax rates respectively? (round to nearest whole percent)

a)  29% Average, 25% Marginal

b)  39% Average, 31% Marginal 

c) 32% Average, 39% Marginal 

d)  34% Average, 39% Marginal

2) Your are projecting Operating Revenues and Expenses of $200K and $130K respectively.

You are considering a project that would provide additional Revenues and Expenses of

$40K and $20K respectively.  What is the incremental tax rate of the project?

a) 29.54%

b) 17.86%

c) 20.94%

d) 31.75%

3) If your company's taxable income is $80,000 and state taxes are 6% and federal taxes are

34%, how much TOTAL TAXES do you owe?

a) $25,568

b) $30,368

c)  $32,000

d) $27,200

4) For a certain commodity, prices increase by 50% the first year and 30% the second year.

Determine the average inflation rate for this commodity over this two-year period.

a) 80.0%

b)  40.5%

c) 39.6%

d) 40.0%