Saving to Meet Long-Term Objectives-Such as Retirement, College Attendance, or to Purchase

question 57

Multiple Choice

Saving to meet long-term objectives-such as retirement, college attendance, or to purchase a home,-is called ________ saving.

• A)public
• B)bequest
• C)precautionary
• D)life-cycle

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Definitions:

Unavoidable Costs

Costs that cannot be eliminated, reduced, or postponed, and must be incurred regardless of specific business decisions or changes in operations.

Present Value Method

A technique used to determine the present value of future cash flows or income streams to evaluate investment projects or financial products.

Net Market Value

The amount that could be obtained from selling an asset in the market after deducting any selling costs or liabilities.

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.