The Act of Determining How Wealth Will Be Distributed Before

question 11

Multiple Choice

The act of determining how wealth will be distributed before or upon death is

• A) estate planning.
• B) retirement planning.
• C) not needed for most people.
• D) liquidity planning.

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Definitions:

Net Present Value

The calculation used to determine the current worth of a future stream of cash flows, adjusted for the time value of money.

Depreciation Tax Shield

The reduction in income taxes that results from taking a deduction for depreciation on the company's tax return, effectively reducing taxable income.

Cash Outlays

Payments in cash for expenses or investments made by a business or individual.

Auto Leases

Contracts that allow a person to use a car for a set period of time in exchange for regular payments, without owning the vehicle.