Scott, Age 68, Has Accumulated $850,000 in a Defined Contribution

question 36

Multiple Choice

Scott, age 68, has accumulated $850,000 in a defined contribution plan, $100,000 of which represents his own after- tax contributions.If the full amount is distributed in 2019, his early distribution penalty is:

• A)$0.
• B)$75,000.
• C)$85,000.
• D)$127,500.
• E)None of these.

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Definitions:

Contribution Margin Ratio

A ratio that measures the proportion of sales revenue that exceeds variable costs, indicating how effectively a company can cover its fixed costs.

Target Profit

The desired net profit a company aims to achieve for a specific period.

Monthly Fixed Expense

Costs that do not vary in total regardless of production volume or sales levels, paid on a monthly basis.

Net Operating Income

Net operating income is the total profit of a company derived from its regular business operations, excluding expenses and revenues from non-operational activities.