A Sole Proprietor Establishes a Keogh Plan

question 59

True/False

A sole proprietor establishes a Keogh plan.The highest effective percentage of earned income she can contribute is 25 percent.

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Definitions:

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, which can also increase the risk of loss.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Average Cost

A method of inventory costing, or determining an investment's cost, by taking the total cost of items and dividing it by the total number of items.

Capital

Refers to the financial resources that businesses use to fund their operations and growth.