Sam and Lele Are in Their Late 20s with 3

question 105

Multiple Choice

Sam and Lele are in their late 20s with 3 young children.Their most important financial planning concerns would probably include all of the following except

• A)asset acquisition planning.
• B)liability and insurance planning.
• C)retirement and estate planning.
• D)savings and investment planning.
• E)employee benefit planning.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales.

Depreciation Tax Shield

The Depreciation Tax Shield refers to the reduction in income tax a company achieves through deducting depreciation expenses, thus lowering its taxable income.

Straight-Line Method

An accounting method of depreciation where an asset's cost is reduced equally over its useful life.

Project Life

The duration over which a project is expected to operate or be productive before it is decommissioned or ends.