EPF Unit 4 Financial Planning Review

Which of the following best describes "Disposable Income"?

• A) The total earnings received after all deductions have been made

• B) A sum of money paid regularly by a company to its shareholders out of its profits

• C) The total earnings before any deductions are made

• D) Income from properties or investments

What does "Passive Income" refer to?

• A) A set amount of money paid at regular intervals by a company to its shareholders

• B) Earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved

• C) A fixed regular payment, typically paid on a monthly or biweekly basis, but often expressed as an annual sum

• D) Money that is spent on operating or running a business

What is a "Fixed Cost"?

• A) A cost that does not change with an increase or decrease in the amount of goods or services produced

• B) Money paid to shareholders from a company's profits

• C) Income remaining after deduction of taxes, social security charges, etc.

• D) The total earnings received after all deductions have been made

Choose the accurate definition for "Variable Cost":

• A) A cost that remains constant, irrespective of any changes in the production levels

• B) A cost that varies with the level of production

• C) The total amount of earnings before deductions

• D) A legal document expressing the wishes of a person after their death

The term "Wage" refers to:

• A) An ongoing cost that does not change in amount

• B) A fixed regular payment, typically paid on a monthly basis

• C) Payment for labor or services to workers, especially remuneration on an hourly, daily, or weekly basis

• D) A person relying on another for financial support

"Salary" can be defined as:

• A) The total of all earnings before any deductions

• B) A fixed regular payment, typically paid on a monthly or biweekly basis, but often expressed as an annual sum

• C) A sum of money paid regularly by a company to its shareholders out of its profits

• D) Money earned with little to no effort

"Gross Income" is best described as:

• A) A cost that changes with the level of production

• B) A fixed regular payment, typically paid on a monthly basis

• C) The total income before any deductions such as taxes or retirement contributions

• D) The amount remaining from one's income after all deductions

"Net Income" refers to:

• A) The sum of money received after all deductions, such as taxes and retirement contributions

• B) The total of all earnings before any deductions

• C) Money earned from investments without active involvement

• D) A type of insurance payment

A "Dependent" refers to:

• A) A sum of money paid regularly by a company to its shareholders out of its profits

• B) A person who relies on another, especially a family member, for financial support

• C) A fixed regular payment, typically paid on a monthly or biweekly basis

• D) Money earned with little to no effort

Which statement best describes an insurance "Premium"?

• A) A sum of money paid regularly by a company to its shareholders

• B) The amount paid periodically to the insurer by the insured for covering their policy

• C) Money earned with no effort

• D) A person relying on another for financial support