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Ted and Rose Are Saving More Today Because They Want

question 69

Multiple Choice

Ted and Rose are saving more today because they want to make sure that their children will inherit a large sum of money when they die.This is an example of the ________ motive for saving.


Definitions:

Residual Income

Income that remains after all costs and expenses, including minimum required return on investment, have been subtracted.

Operating Assets

Long-term assets used in the operations of a business, including property, plant, and equipment, that generate income.

Net Operating Income

The profit generated from a company’s everyday business operations, calculated by subtracting operating expenses from revenue.

Minimum Required Rate

The lowest rate of return or discount rate acceptable for a project or investment to proceed.

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