Patrick Is Age 30,single,and Has AGI of $101,000

question 69

Multiple Choice

Patrick is age 30,single,and has AGI of $101,000.He would like to contribute to a Coverdell Education Savings Account (CESA) for his niece,Eileen.What is the maximum CESA contribution Patrick can make for Eileen in 2017?

• A)$0.
• B)$1,200.
• C)$1,500.
• D)$2,000.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Net Present Value

An evaluation metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Capital Budgeting Decisions

The process of making investment decisions in fixed assets or projects with long-term implications for an organization's financial health.

Accounting Rate of Return

A financial ratio used to estimate the profitability of an investment, calculated as average annual profit divided by initial investment cost.