When Pei received a one-time inheritance from her grandmother, she considered including it in her budget as income. What is the problem with taking that approach?

Question

When Pei received a one-time inheritance from her grandmother, she considered including it in her budget as income. What is the problem with taking that approach?

A. Including it would make her average income estimate less accurate.

B. The inheritance can be considered an investment for tax purposes.

C. The inheritance is not a fixed expense.

D. Adding the inheritance would make it less liquid.

Answer 1

C. The inheritance is not a fixed expense.

Explanation: An inheritance is not a reliable or regular source of income, as it is a one-time event. Including it in a budget as income could lead to unsustainable spending habits or inaccurate financial planning.

Answer 2

is this right

Answer 3

Yes, that is correct. The problem with including a one-time inheritance in a budget as income is that it is not a fixed or regular source of income, and therefore should not be counted on as part of ongoing financial planning.