This refers to Reading 9, practice problem 12A, unique circumstances.
The information says:
We benefit from two investment accounts:
- The Gift Fund represents our gift to the college. During our life-times, we will receive fixed annual payments of $40,000 (tax free) from the Gift Fund.
The answer says:
Esbalishment of the Gift Fund had increased the Smith’s dependence on fixed payments.
**So why does the establishment of the Gif Fund increase Smith’s dependence on fixed payments?