Which of the Following Is True Regarding an SEP

question 123

Multiple Choice

Which of the following is true regarding an SEP?

• A) Cannot discriminate in favor of highly compensated employees.
• B) Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $52,000.
• C) Self-employed individuals cannot create and contribute to an SEP.
• D) The plan must cover all employees who have reached the age of 18,who have worked for the employer for at least two of the preceding five years,and who received at least $550 in compensation.

---

Definitions:

Discount Rate

This interest rate is employed within the scope of DCF to ascertain the present valuation of future cash streams.

Initial Cash Outlay

The immediate amount of cash required to purchase an asset or start a project, often including the initial investment plus startup costs.

Capital Budgeting Surveys

Surveys conducted to assess the various investment opportunities and capital expenditures decisions faced by businesses.

Payback Analysis

A calculation used to determine how long it will take to recover the cost of an investment, focusing on the payback period.