This Year,the Nano Trust Reported $50,000 Entity Accounting Income and $40,000

question 101

Multiple Choice

This year,the Nano Trust reported $50,000 entity accounting income and $40,000 distributable net income (DNI) .Nano distributed $30,000 cash to Horatio,its sole income beneficiary.Nano is a complex trust.Nano's distribution deduction is:

• A)$30,000.
• B)$40,000.
• C)$50,000.
• D)$0.Because the distributions of a complex trust are discretionary,no deduction is allowed.

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Definitions:

Discount Rate

A specific rate used in the method of discounted cash flow analysis for calculating the present value of money flows anticipated in the future.

Net Present Value

The gap between what cash inflows and cash outflows are worth now, calculated over a specified period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity.

Incremental Cost Approach

A decision-making process focusing on the additional costs and benefits associated with a particular business decision.