W understated his age at the time he wanted to purchase the insurance policy; he was 52 then but he stated his age as 50. The normal procedure under the misstatement of age provision in regard to the payment of the death claim is that THE AMOUNT THAT WILL BE PAID TO W'S BENEFICIARIES WILL BE EQUIVALENT TO THE AMOUNT THAT THE PREMIUM WOULD HAVE BOUGHT IF THE CORRECT AGE HAD BEEN STATED.
If you owned and lived in the place for two of the five years before the sale, than up to $250,000 of profit is tax free.
Answer:
Sunk cost fallacy.
Explanation:
Sunk costs - are costs that have been incurred as a result of past decisions. Now are unrecoverable.
A trap which enables a investor to invest more in the sunken costs to earn profit.
Are cost incurred in the past tha cannot be changed.
Sunk cost fallacy - considering sunk costs when making new decisions at the margin. Can lead to using out of date facilities and incurring large opportunity costs.
Is the continued investment in something no longer desired to reconcile the loss of the initial investment.
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
