you expect a share of econnews to sell for $65 a year from now. if you are willing to pay $61.06 for one share of the stock today, you expect a dividend payment of $4, and the rate of return on safe assets is 5 percent, how much is your risk premium? multiple choice 1.5 percent 6.5 percent 8.0 percent 13.0 percent
Answers
If the expected future price of EconNews shares is $65, and the current price you are willing to pay is $61.06, if the dividend payment is $4, and rate of return is 5%, then the risk premium is 8.0% percent.
The risk premium can be calculated by subtracting the risk-free rate of return from the expected rate of return on the investment.
The expected rate of return on the investment can be calculated as follows:
Expected Rate of Return = (Dividend + Expected Price Appreciation) / Current Price
In this case, the dividend is $4 and the expected price appreciation is $65 - $61.06 = $3.94. The current price is $61.06.
Expected Rate of Return = ($4 + $3.94) / $61.06
Expected Rate of Return ≈ 13.02%
The risk-free rate of return is given as 5%.
Risk Premium = Expected Rate of Return - Risk-Free Rate of Return
Risk Premium ≈ 13.02% - 5% ≈ 8.02%
Hence, the risk premium is approximately 8.02%, which rounded to the nearest percent is 8.0%.
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Related Questions
For a perfectly competitive market to function properly, which of the following must buyers and sellers have access to?
Sufficient technology
Uncompetitive products
Economies of scale
Adequate information
Answers
Answer:
Adequate information
Explanation:
Both the buyers and sellers must have access to adequate information. Information are both vital for both the buyers and sellers. For the buyer, it influences their decision making and buying choice. For the seller, it helps them to know the trending buyer need. Hence, for a perfectly competitive market to function well, the buyer and seller must have access to adequate information.
Choosing to go to college over getting a job right out of high school is an example of a(n)___.
fixed cost
opportunity cost
Ο Ο Ο
variable cost
O none of the above
Answers
Because your are choosing to do one out of the two
Which of the following terms is used to describe the proportion of deposits that banks are legally required to deposit with the central bank? o A. discount requirements reserve requirements ° C. deposit requirements O D-monetary requirements QUESTION 2 1 points Save Answer If the Fed purchases S1000 in government bonds on the open market, and the Required Reserve Ratio is 20%, how much money will be created by this open market operation 0 A. $5000 OB.$1000 C. $9000 D. $4000 Click Save and Submit to save and submit. Click Save A Answers to save all answers Save All Answers Save and Suubmit
Answers
The term used to describe the proportion of deposits that banks are legally required to deposit with the central bank is reserve requirements. When the Federal Reserve purchases $1000 in government bonds on the open market, and the Required Reserve Ratio is 20%, this open market operation will create $5000.
The Federal Reserve imposes reserve requirements on banks, which are the proportion of deposits that banks must keep on hand. Banks must hold a portion of their deposits as reserves to maintain financial stability and liquidity. Reserve requirements help to limit the amount of money banks can lend out, ensuring that they have enough money on hand to meet customer withdrawals. Banks that don't meet the reserve requirement can borrow from the central bank to meet their needs. Open market operations are one of the Federal Reserve's tools for implementing monetary policy. The Federal Reserve purchases government securities on the open market during open market operations. When the Federal Reserve buys government securities from banks, it credits the banks' accounts, increasing their reserves. This has the effect of increasing the money supply and can help to stimulate economic growth.
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Sample advertisement: Lose body fat and feel healthier with our proven supplement, Edgozene! Losing weight is easy with Edgozene! Just take two pills before each meal. You'll feel more full and eat less. No other diet pill offers what our product does - and for a limited time, if you buy now you can get two bottles of Edgozene for just $29.95! Which of these statements from the advertisement are facts? Check all that apply. A) Losing weight is easy with Edgozene. B) You will lose weight and feel healthier if you take Edgozene. C) You will receive two bottles of Edgozene when you order. D) Edgozene costs $29.95. E) You won’t eat as much if you take Edgozene.
Answers
Answer:
C) You will receive two bottles of Edgozene when you order.
D) Edgozene costs $29.95.
Explanation:
We assume that 1 order costs $29.95 and delivers 2 bottles. (That is, we assume that you cannot order 1 bottle for $14.98.) Under that assumption, the cost is $29.95 (D) and the amount delivered is 2 bottles. (C)
There is no way to determine whether any other claims are facts, or not. As a rule, feelings experienced when eating are a function of a lot more than just a diet pill. That is, you may or may not eat less when/if you feel more full.
Answer:
c,d
Explanation:
The annual report for Jackson Farms disclosed that 1 billion shares of common stock have been authorized. At the beginning of 2017, 810 million shares had been issued and the number of shares in treasury stock was 111 million. During 2017, the only common share transactions were that 19 million common shares were reissued from treasury and 30 million common shares were purchased and held as treasury stock.
Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2017.
Answers
Answer:
a: 810 (million)
b: 111-19(issued)+30(purchased)= 122 (million)
c: 810 (issued)-122 (treasury)=688 million
Which of the following could help determine a job candidate's trustworthiness?
A) A credit check
B) A recorded oral test
C) An in-person interview
D) Closed-ended interview questions
Answers
Answer:
C) An in-person interview
Explanation:
All the options listed, the best choice to determine a candidate's trusworthiness is the in-person interview. An in person-interview allows the interviewer to get to know the candidate better, because open-ended questions can be made about the candidate's proffesional and personal life.
In this type of interview, it is the job of the interviewer to analyze the answers, and reach a conclusion that can determine whether the person is to be trusted or not.
Describe how easy or difficult you feel it will be to leave your investments alone for at least five years. Explain why. How can you remind yourself of the benefits of staying invested for the long term? HELP
Answers
The ease or difficulty of leaving investments untouched for at least five years can vary from person to person based on their individual circumstances and mindset.
Here are some factors that may influence one's ability to stay invested for the long term:
Financial goals and stability: If an individual has clear long-term financial goals and a stable financial situation, they may find it easier to stay invested. Knowing that the investments are aligned with their objectives and are part of a well-thought-out plan can provide confidence and motivation to stay invested.
Risk tolerance: A person's risk tolerance, or their willingness to accept fluctuations in the value of their investments, can impact their ability to stay invested. If someone is more risk-averse and gets easily anxious about market volatility, they might find it more challenging to resist the urge to sell during periods of market downturns.
Emotional discipline: Emotional discipline plays a crucial role in long-term investing. It requires the ability to detach oneself from short-term market fluctuations and make rational decisions based on long-term trends and goals. Developing emotional discipline can help individuals resist impulsive actions driven by fear or greed.
To remind oneself of the benefits of staying invested for the long term, consider the following strategies:
Education and research: Learn about the historical performance of the market over the long term and how staying invested can potentially yield higher returns. Understanding the power of compounding and the benefits of staying invested can provide motivation to remain committed.
Focus on long-term goals: Regularly remind yourself of your long-term financial goals and how staying invested aligns with those objectives. Visualize the impact of long-term growth and the potential benefits it can bring, such as retirement security or funding major life milestones.
Seek professional advice: Consult with a financial advisor who can provide guidance and reassurance during periods of market volatility. They can help you stay focused on your long-term strategy and provide perspective on market fluctuations.
Diversify your portfolio: A well-diversified portfolio can help reduce the impact of market volatility and increase the chances of long-term success. Knowing that your investments are spread across different asset classes and sectors can provide a sense of stability and confidence.
Set up reminders: Use tools such as calendar reminders or investment tracking apps to periodically review your investment performance and reinforce the importance of staying invested for the long term. These reminders can help you stay engaged and committed to your investment strategy.
Remember, every investor's situation is unique, and it's essential to assess your own circumstances and risk tolerance before making any investment decisions. If you're uncertain, consider consulting with a financial professional who can provide personalized advice based on your specific goals and risk profile.
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A locally
Operated business produces locally demanded goods and services justify this statement
Answers
The best justification of the statement that a locally operated business produces locally demanded goods and services is:
They provide goods and services which the people in the area wants.According to the given question, we are asked to state the best justification of the statement that a locally operated business produces locally demanded goods and services
As a result of this, we can see that when a local business produces goods, then it is more liable to listen to the needs and demands of the local people and which would meet the customer's needs and also give profit to the business.
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Which of the following is not true regarding the determination of relevant costs and relevant revenues associated with quality-related initiatives (such as the move to JIT production)?
a.Long-term effects of relevant costs and relevant revenues are usually assessed using discounted cash flow (DCF) capital budgeting decision models.
b.Relevant costs are defined as future costs that differ between and among decision alternatives.
c.Relevant costs exclude opportunity costs since these costs are not normally recorded by accounting systems.
d.Relevant revenues could include the contribution margin associated with increased sales (because of decreased cycle times associated with JIT).
e.Relevant costs include all "avoidable" costs.
Answers
The statement that is not true is c. Relevant costs exclude opportunity costs since these costs are not normally recorded by accounting systems
Opportunity cost refers to the decision that the buyer of goods must make between options that are mutually exclusive owing to restricted resources. Due to the selection and available resources, only one item is purchased. To get something else, something else must be given up. As a result, it refers to the price of something that must be sacrificed in order to enjoy something better.
Opportunity costs are relevant costs. Opportunity costs are the expense of giving up the next best option while making a choice. Opportunity costs might be important when weighing the advantages and disadvantages of various alternatives in the context of quality-related efforts like the switch to Just-in-Time (JIT) manufacturing. Option c is inaccurate as a result.
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The internal rate of return and net present value methods Multiple Choice always give the same investment decision answer. never give the same investment decision answer. usually give the same investment decision answer. always give conclusions different from the payback method.
Answers
The payback method does not consider the time value of money and therefore may provide different investment decisions compared to the IRR and NPV methods. Option D.
The internal rate of return (IRR) and net present value (NPV) methods usually give the same investment decision answer.
Both the IRR and NPV are popular methods used in capital budgeting to evaluate investment opportunities. The IRR is the discount rate at which the present value of cash inflows equals the present value of cash outflows.
Both methods are used to determine the profitability of an investment project by considering the time value of money. The primary difference between the two methods is the way in which they discount future cash flows.
While IRR calculates the discount rate that equates the present value of cash inflows and outflows, NPV discounts all cash flows at a predetermined discount rate to calculate their present value.
In general, when the NPV of a project is positive, it is considered a profitable investment, while a negative NPV suggests that the project is not profitable.
Similarly, if the IRR of a project is higher than the required rate of return, the project is considered profitable. Conversely, if the IRR is lower than the required rate of return, the project is not considered profitable.
While there are some situations in which the IRR and NPV methods may give different investment decisions, such as when the cash flows are unconventional, they usually provide the same conclusion. So the correct answer is Option D.
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broker harding requires all of his buyers to sign offers with the stipulation that they will use acme home inspection services. this practice is called a
Answers
Broker Harding requires every one of his purchasers to sign proposals with the limitation that they will utilize top home examination administrations this practice is called a tying arrangement.
A tying game plan happens when the merchant sells or leases an item or administration depends upon the client concurring, through legally binding or specialized prerequisites, to secure a subsequent item or administration.In a commonplace tying plan where a vendor is expected to join two of her items, these items are in many cases two unique results of hers.For instance, lodging and land, clothing administrations, transportation administrations, etc.In any case, there is another item that makes vagueness when tied by the dealer. or on the other hand, tied) item.Learn more about broker Harding:
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a business plan that provides information on a company, its products or services, its market, and critical risks to prospective business or marketing partners or to prospective key employees is called a(n) .
Answers
A business plan that provides information on a company, its products or services, its market, and critical risks to prospective business or marketing partners or to prospective key employees is called an invention plan.
Invention Plan informs prospective business or marketing partners or key employees about the company, product/service, market, and critical risks.
This business plan should briefly explain ones corporation, ones brand, the main aspects of ones market research, ones strategic plan, ones management, and ones financial plan.
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Scenario: Over the last several years there has been a decrease in the number of new homes purchased within Country DF. One reason for this is that taxes are high, so citizens have less money to invest in such large purchases. The federal government has determined that actions need to be taken to encourage citizens to purchase homes and boost economic growth. What action can the government of Country DF take to encourage citizens to purchase homes?
Answers
Answer:
lower income taxes for homeowners
Explanation:
Answer: D
Explanation:
EDGE 2022
Interest rate swaps exchange cash flows of a local firm's long-term debt with cash flows of another local firm's short-term debt. True False
Answers
The statement "Interest rate swaps exchange cash flows of a local firm's long-term debt with cash flows of another local firm's short-term debt" is false.
Interest rate swaps involve the exchange of cash flows between two parties, but not necessarily between a local firm's long-term debt and another local firm's short-term debt. In an interest rate swap, two parties agree to exchange interest payments based on a specified notional amount. These swaps are often used to manage interest rate risk or to take advantage of differences in borrowing costs.
For example, let's say Company A has a variable interest rate on its long-term debt and Company B has a fixed interest rate on its short-term debt. They could enter into an interest rate swap where Company A agrees to pay Company B a fixed interest rate in exchange for receiving a variable interest rate. This allows Company A to convert its variable rate to a fixed rate, while Company B can take advantage of the lower variable rate.
Interest rate swaps can also involve different types of debt instruments, such as fixed-rate debt being exchanged for floating-rate debt. The key is that the parties involved agree to exchange cash flows based on an agreed-upon reference rate, such as LIBOR (London Interbank Offered Rate).
In summary, interest rate swaps involve the exchange of cash flows based on an agreed-upon reference rate, but they are not limited to exchanging cash flows of a local firm's long-term debt with cash flows of another local firm's short-term debt.
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Question #1
Multiple Choice
What is it called when a small number of companies control more than 40 percent of a market?
O monopoly
O oligopoly
O competitive market
duopoly
Question # 2
Fill in the Blank
Answers
Answer:
Oligopoly.
Explanation:
An oligopoly can be defined as a market structure comprising of a small number of firms (sellers) offering identical or similar products, wherein none can limit the significant influence of others.
Hence, it is a market structure that is distinguished by several characteristics, one of which is either similar or identical products and dominance by few firms.
The characteristics of an oligopolistic market structure are;
1. Mutual interdependence between the firms.
2. Market control by many small firms.
3. Difficult entry to new firms.
According to the concentration ratio, when a small number of companies control more than 40 percent of a market, it is called an oligopoly.
Which of the following students is most likely to receive a merit-based scholarship?
A.
a student from a low-income family
B.
a student with a delinquency record
C.
a student from a political family
D.
a student with a high academic score
E.
a student from a middle-income family
Answers
Answer:
D
Explanation:
An individual taxpayer, who is a sole proprietor, owns a specialized truck used to empty portable toilets used by migrant workers on nearby farms. last year, the taxpayer purchased new gloves and work boots to wear on the job. the taxpayer should deduct the cost of the gloves and boots on:________
Answers
The taxpayer should deduct the cost of the gloves and boots on their Schedule C (Form 1040), which is used to report income and expenses for their sole proprietorship. These items would be considered ordinary and necessary expenses directly related to their business of emptying portable toilets for migrant workers on nearby farms.
An individual taxpayer who is a sole proprietor and owns a specialized truck used to empty portable toilets used by migrant workers on nearby farms should deduct the cost of the gloves and boots on Schedule C (Form 1040).
Here's a step-by-step explanation:
1. The taxpayer is a sole proprietor, which means they are self-employed and report their business income and expenses on Schedule C (Form 1040).
2. The gloves and work boots are considered necessary and ordinary business expenses for the taxpayer's job.
3. On Schedule C (Form 1040), the taxpayer should report these expenses in Part II under the appropriate expense category, likely "Supplies" (Line 22) or "Other Expenses" (Line 27a) if a more specific category is not applicable.
4. By deducting these costs on Schedule C, the taxpayer will reduce their taxable business income, which in turn reduces their overall tax liability.
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Internal Stakeholders → Exhibition that is open to the public, usually requiring an entrance fee.
True
False
Answers
Answer:
Explanation:
t
The Answer to this question is False
The accounting equation can be stated as
A. Expenses = Liabilities - Owner's Equity
B. Assets - Liabilities = Owner's Equity
C. Liabilities = Revenue + Owner's Equity
D. Owner's Equity = Assets + Liabilities.
Answers
Answer:
a
Explanation:
a
When an entrepreneur takes some of his profits and replaces old machinery, he is investing in
A. Natural Resources
B. Human Capital
C. Land
D. Capital Goods
Answers
Answer:
D. Capital Goods
Explanation:
Capital goods are physical assets that a business uses to generate revenues. Usually, capital goods have a useful life beyond one year. It implies that they are not meant for sale in the current financial year.
Capital goods include machinery, plants, and equipment, and other long term tangible assets. Some capital goods require a considerable sum of funds to acquire. Costs incurred in acquiring capital goods are spread over the number of their useful life.
Answer:
ok
Explanation:
ok
What is the gross income for a real estate agent in 2021?
Answers
Answer:
It depends on where you live and your experience level, but in the US a real estate agent can make approximately $82,898 a year, while you can expect to be paid around 15 to 30 thousand a year, within the first few years.
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When writing a business plan, it
is important to think about the competition. Think of a
product or service you use often. What are the advantages it
has over competing products?
Answers
Say you are developing a phone, what features does it have over Apple? Let’s say Apple released a new feature, the greatest touch screen by average standards, so how can you top that? You can’t cause it’s the “greatest” by average standards
the age discrimination in employment act specifically focuses on hiring practices that discriminate against multiple choice teenagers seeking first-time employment. recent college graduates. people of all ages. people aged 40 and older. women of all ages.
Answers
The Age Discrimination in Employment Act covers individuals over the age of 40. this statement is true.
Hiring is a paid and reciprocal work arrangement between a recruiter and an employee. The term applies to a person hired for salary or compensation to initiate a job or task for an organization. countless nouns. Employment means doing paid work. She couldn't find a job. He regularly drove from his home to his place of work. Synonyms: job, work, business, status Synonyms for employment.
Job creation helps the economy through GDP. When a person is hired, a salary is paid by the employer. As a result, they will have money to spend on food, clothing, entertainment, and various other areas. The more a person spends, the greater the demand.
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Which of the following is an example of physical capital that might be used by a business to install and service car tires?
A. hydraulic lifts for cars
B. the employees who install the tires
C. tire installation services
D. new tires
Answers
The following is an example of physical capital that might be used by a business to install and service car tires: A. hydraulic lifts for cars.A hydraulic lift for cars is a piece of physical capital used in the installation and maintenance of tires.
Hydraulic lifts for cars, in particular, are designed to raise cars off the ground so that workers may more easily access the underside of a vehicle, including its wheels and tires. This equipment assists in the removal and replacement of car tires, making the procedure faster and more efficient. As a result, option A is the correct answer.
In order to be considered as The hydraulic lifts for cars is a piece of physical capital used in the installation and maintenance of tires. Hydraulic lifts for cars are designed to raise cars off the ground so that workers may more easily access the underside of a vehicle, including its wheels and tires. This equipment assists in the removal and replacement of car tires, making the procedure faster and more efficient.A hydraulic lift is a significant investment for a tire installation and maintenance business. Hydraulic lifts are essential equipment in this type of business because they save time and labor costs while also providing safety for workers. Workers would have to manually remove and install tires, and this can take time, and in a busy business, time is money.Hydraulic lifts for cars are a significant piece of physical capital that businesses invest in to increase their overall profitability. By having this equipment, tire installation and maintenance businesses can take on more work, be more efficient, and better serve their customers. As a result, it is clear that A, hydraulic lifts for cars, is the correct answer to the question.
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Net Income ($82)
Charges in Working Capital $100
FCFO
$[?]
$150
Fill in the blanks
on this financial
statement.
Disposal of PPE
Purchase of PPE
FCFI
Issuance of Stock
($27)
$[ ]
$540
Dividend Payment ($110)
Issuance of Debt
$68
Debt Repayment ($25)
Interest Expense
($75)
FCFF sĩ
Total FCF $[
![Net Income ($82)Charges in Working Capital $100FCFO$[?]$150Fill in the blankson this financialstatement.Disposal](https://i5t5.c14.e2-1.dev/h-images-qa/contents/attachments/fpCbjSVfQ7LnbsXDrgjfwioC86iG5J7F.png)
Answers
FCFO = $182
FCFI = $216
FCFF = $ -82
Total FCF = $583
What are the above terminologies and how did we arrive at the answers?FCFO - Free Cahs Flow to Firm is derived by adding Net Income to Charges in Working Captial
= $82 + $100
= $182
FCFI - Free Cash flow to Firm (Investing
= Disposal of PPE - Purchase of PPE + Issuance of Debt + Debut repayment
= 150 - 27 + 68 + 25
= $216
FCFF = Free Cash Flow to Firm
= Dividend payment + Interst Exprense + FCFI
= $110 + 75 + 216
= $401
Total FCF = FCFO + FCFF
= $182 + $401
= $583
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______ Is a market in which a large number of suppliers compete with each other to satisfy the needs and wants of a large numbers of consumers at a competitive price.???
Answers
Answer : Monopolistic competition
Answer:
Monopolistic Competition
Explanation:
In a monopolistic competitive market, there are large numbers of sellers who do not sell identical products instead they sell differential products. They compete with each other at a competitive price. The products could be differentiated in many ways including quality, style, location and even brand name. Since they compete at a competitive price, if there is a substantial rise in the price of any of the products, the buyers could quickly shift from one product to another. The most crucial factor behind product differentiation is because of geographical factors. Under a monopolistic competitive market, the sellers do not have any influence over customer loyalty and limited control over the price.
Two studies by Basu (1977, 1983) found that firms with high P/E ratios A. earned higher average returns than firms with low P/E ratios B. earned the same average returns as firms with low P/E ratios C. earned lower average returns than firms with low P/E ratios D. had higher dividend yields than firms with low P/E ratios
Answers
According to the question the correct answer is C. earned lower average returns than firms with low P/E ratios.
The studies conducted by Basu in 1977 and 1983 found that firms with high Price/Earnings (P/E) ratios tended to have lower average returns compared to firms with low P/E ratios. The P/E ratio is a valuation metric that measures the price investors are willing to pay for each dollar of earnings generated by a company. A high P/E ratio indicates that investors are paying a premium for future earnings growth.
In Basu's studies, it was observed that despite the higher expectations reflected in the higher P/E ratios, firms with high P/E ratios experienced lower average returns. This finding suggests that the market may have overvalued these firms, leading to subsequent underperformance.
The other options presented in the question, such as firms with high P/E ratios earning higher average returns (option A), earning the same average returns as firms with low P/E ratios (option B), or having higher dividend yields (option D), are not supported by Basu's studies.
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American Airlines paid the television producer to be a part of the show. This is known as ...
A) brand endorsement
B) product awareness
C) product placement
D) brand awareness
Answers
Answer:
A) brand endorsement
Explanation:
"Endorsements are a form of advertising that uses famous personalities or celebrities who command a high degree of recognition, trust, respect or awareness amongst the people. Such people advertise for a product lending their names or images to promote a product or service."
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The ROI calculation will indicate: Select one: a. the overall quality of a company's earnings. b. the invested capital generated from each dollar of income. c. the sales dollars generated from each dollar of income. d. the percentage of each sales dollar that is invested in assets. e. how effectively a company used its invested capital.
Answers
The ROI calculation will indicate (C) how effectively a company used its invested capital.
What is ROI?Return on investment, often known as return on costs, is a ratio of net income to investors. A high ROI indicates that the benefits of the investment outweigh the costs. ROI is used as a performance indicator to evaluate the efficiency of an investment or to compare the efficiencies of several investments.What is ROI calculation?A computation that compares the monetary value of an investment against its cost. (profit minus cost) / cost is the ROI formula. If you earned $10,000 from a $1,000 investment, your return on investment (ROI) would be 0.9, or 90%. This is commonly obtained by using an investment calculator.The ROI calculation will show how well a business utilizes its invested capital.As the description says, the ROI calculation will show how well a business utilizes its invested capital.
Therefore, the ROI calculation will indicate (C) how effectively a company used its invested capital.
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Complete question:
The ROI calculation will indicate:
A. the percentage of each sales dollar that is invested in assets.
B. the sales dollars generated from each dollar of income.
C. how effectively a company used its invested capital.
D. the invested capital generated from each dollar of income.
E. the overall quality of a company's earnings.
What is true of a flexible spending account but not a health saving account?
Answers
Flexible spending accounts (FSAs) are held by employers and are less flexible than health savings accounts (HSAs).
This is further explained below.
What is a Flexible spending account?Generally, In other words, FSA funds must be used up before they may be rolled over to the next year, and any unused money that is carried over from the previous year is forfeited.
Unused funds are turned over to your employer, who has the option of either distributing them among the participants in the FSA plan or using them to reduce the expenses of managing the benefits program.
A Flexible Spending Account, also known as a flexible spending arrangement, is a specialized account into which money may be deposited and then used to pay for certain out-of-pocket medical expenses. You can also refer to this kind of account as a flexible spending arrangement.
You are exempt from paying taxes on this sum of money. This indicates that you will be able to save a sum that is equivalent to the taxes that you would have been required to pay on the money that you have put aside.
In conclusion, The most important distinction between health savings accounts (HSA) and flexible spending accounts (FSA) is that HSAs are in the authority of the person and enable contributions to be carried over into subsequent years, while FSAs are held by the employer and have fewer options for spending.
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