EXAM 400 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)| ALREADY GRADED A+| NEWEST

EXAM 400 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS)| ALREADY GRADED A+| NEWEST Exceptions to the 10% early withdrawal penalty for distributions taken from a 401(k) prior to age 59 include all of the following except - answer-A) distributions for a first-time home purchase, up to $10,000. B) distributions to cover large unreimbursed medical expenses. C) distributions as part of a series of substantially equal payments. D) distributions resulting from a QDRO. Answer: A Distributions for a first-time home purchase and qualified higher education expenses are exempt from the 10% early withdrawal penalty only in IRAs. The other options pertain to 401(k)s as well as IRAs. Tin parachutes - answer-Tin parachutes apply to middlemanagement employees, and golden parachutes apply to uppermanagement executives. All of the following apply to voluntary early retirement programs except: - answer-A) they should be analyzed based on their future value. B) they present pluses and minuses for the eligible employee. C) they rarely result in lawsuits against the companies offering the programs. D) they provide a set of incentives to reduce corporate headcount. Answer: A Voluntary early retirement incentives provide a set of incentives to reduce corporate headcount. They present pluses and minuses for the eligible employee that should be evaluated based on their net present value. Such arrangements rarely result in lawsuits because employees select themselves for termination. They should be analyzed based on their present value.