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Nutka1998 [239]
3 years ago
8

Maria, age 28, wants to pay no more than $300 a year in life insurance. What is the face value of the largest 20-year term polic

y she can buy without spending more than $300 annually? a. $234,000 b. $158,000 c. $11,000 d. $567,000 Please select the best answer from the choices provided A B C D
Business
1 answer:
VMariaS [17]3 years ago
7 0

Answer:

Explanation:

Net Cost of Life Insurance Premium : Life insurance policy entails Premium to be paid by the insured at a monthly / quarterly interval. insured often gets dividend from the insurance company and in that case, the net cost of premium will be low

The 20 years premium can be calculated with Annual Premium which is not given in the question, therefore i will solve for all the option but please pick the answer that the Annual premium is with you

a)   20 years premium = Annual Premium x Number of years

                                     = 11700 x 20

                                    = 234,000

b)   20 years premium = Annual Premium x Number of years

                                     = 7900 x 20

                                    = 158,000

c)  20 years premium = Annual Premium x Number of years

                                     = 550 x 20

                                    = 11,000

d)  20 years premium = Annual Premium x Number of years

                                     = 28350 x 20

                                    = 567,000

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Corner Jewelers, Inc. recently analyzed the project whose cash flows are shown below. However, before the company decided to acc
andreev551 [17]

Answer:

correct option is a. −$59.03

Explanation:

given data

Old cost of capital (r)   8.00%        New cost of capital (r)  11.25%

year                                 0                1                                     2                  3

cash flow                        -$1000       $410                              $410        $410

solution

we know that here old cost of capital (r) NPV will be

old cost of capital (r) NPV = cash flow 0 year + cash flow × \frac{1-(1+rate)^{-time}}{rate}

put here value

old cost of capital (r) NPV = -1000 + 410 × \frac{1-(1+0.08)^{-3}}{0.08}

old cost of capital (r) NPV = $56.61

and

new cost of capital (r) NPV will be

new cost of capital (r) NPV = cash flow 0 year + cash flow × \frac{1-(1+rate)^{-time}}{rate}

put here value

new cost of capital (r) NPV = -1000 + 410 × \frac{1-(1+0.1125)^{-3}}{0.1125}

new cost of capital (r) NPV = -$2.42

so difference is

Difference = -$2.42 - $56.61

Difference = -$59.03

so correct option is a. −$59.03

7 0
3 years ago
In business terms the word buy is equivalent to the word
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3 0
3 years ago
Sexton, Corp., has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 860 $ 940 $ 900 $ 1,000 Sales in the y
earnstyle [38]

Answer:

                                                   Q1               Q2             Q3            Q4

a. Payment of accounts ($)     258.00       282.00       270.00    300.00

b. Payment of accounts ($)     258.00       282.00       270.00    300.00

c. Payment of accounts ($)     258.00       282.00       270.00    300.00

Explanation:

Given:

                              Q1                Q2           Q3           Q4

Sales ($)               860              940         900         1,000

Therefore, we  have:

a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

This is done as follows:

                                                 Q1                Q2           Q3            Q4

Order (30% of Sales) ($)      258.00       282.00       270.00    300.00

Payment of accounts ($)     258.00       282.00       270.00    300.00

b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

A 90-day payables period implies that the payment has be made within the next 90 days or within one quarter or the same quarter. Therefore, we have:

                                                 Q1               Q2             Q3            Q4

Order (30% of Sales) ($)      258.00       282.00       270.00    300.00

Payment of accounts ($)     258.00       282.00       270.00    300.00

c. Calculate payments to suppliers assuming a 60-day payables period.

A 60-day payables period implies the payment for the Order in each of the quarters has to be made in the same quarter.

Therefore, we have:

                                                 Q1               Q2             Q3            Q4

Order (30% of Sales) ($)      258.00       282.00       270.00    300.00

Payment of accounts ($)     258.00       282.00       270.00    300.00

Note:

It can be observed that the answer look the same for all the questions.

6 0
3 years ago
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