The City of Springfield Has Three Pension Plans: a Locally

question 132

Multiple Choice

The City of Springfield has three pension plans: a locally administered police plan for which it is trustee, a statewide cost sharing plan, and a statewide agency plan. The City would include in its CAFR pension trust fund financial statements for:

• A) All three plans.
• B) The locally administered plan plus the statewide agency plan.
• C) Both statewide plans.
• D) The locally administered plan only.

Compare and contrast different investment options based on their risk and return profiles.

Understand the principles of moral hazard and adverse selection in financial markets.

Compute the present value of future cash flows to assess investment opportunities.

Explain the diminishing marginal utility of wealth and its implications for financial decisions.

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Definitions:

Spreadsheet Method

A method of financial analysis or budgeting that uses a spreadsheet software to organize, calculate, and present data.

Noncash Accounts

Noncash accounts are financial accounts that track transactions not involving physical cash, such as depreciation, accruals, and allowances for doubtful accounts.

Purchase of Equipment

The acquisition of physical assets or machinery intended for use in production or operational processes.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions, deferred amounts, and changes in working capital.