Sarah Logan Is a Professor at a Public University

question 179

Multiple Choice

Sarah Logan is a professor at a public university.Her employer makes nontaxable contributions to a plan in her name and reduces her salary by the same amount.What type of retirement plan does Sarah have?

• A)Money-purchase pension plan
• B)Stock bonus plan
• C)Profit-sharing plan
• D)Defined benefit plan
• E)403(b)plan

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Definitions:

Net Present Value (NPV)

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment or project.

Cash Inflows

Money or other forms of financial assets that enter a company, typically from sales, investments, financing, and other business activities.

Depreciation Value

The reduction in value of an asset over time due to wear and tear or obsolescence.

Internal Rate of Return (IRR)

The yield rate at which all of a project's cash flows' net present value becomes null.