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STatiana [176]
3 years ago
5

As the beneficiary of a life insurance policy, you have two options for receiving the insurance proceeds. You can receive a lump

sum of $200,000 today or receive payments of $1,400 a month for 20 years. If you can earn 6 percent on your money, which option should you take and why?
Business
1 answer:
kkurt [141]3 years ago
3 0

Answer:

the option of $200,000 because the value of 1400 for 20 years every monthy is only 195,413.

Explanation:

To determine which is better, we compare the value of $200,000 with the future value of $1400  per month for 20 years at 6 per interest.

The formula  for calculating the future value of annuities is as follows

PV = P × ( 1 − (1+r)−n)/ r

P V= present

P= $1,400

r =6 % or 0.06 % or 0.005 per month

n = 20 years or 240 periods

PV = $1400 x ( 1-(1+0.005]-240)/ 0.005

P=  $1400 x (1-0.3020961415)/0.005

P =$1400 x (0.697903859/0.005)

P= $1400 x 139.5807718

P=$195,413.078

The future value of $1400 at 6 percent for 20 years is $195,413, which is less than $200,000.

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ABC opened for business on January 1, 2018, and paid for two insurance policies effective that date. The liability policy was $5
Whitepunk [10]

Answer:

The balance in ABC's Prepaid insurance-account as on Dec 31, 2018 is <em>$27,000</em>

Explanation:

Liability policy  = ($54,000 / 18) × 6 months

Liability policy = $18,000

Crop damage policy = ($18,000 x 12 / 24)

Crop damage policy = $9,000

ABC's Prepaid insurance-account balance as on Dec 31, 2018 = $27,000

Thus,

Total Liability insurance period = 18

Now,

Expired period period - 12 months ( Jan 1, 2016 to Dec 31, 2016 )

Unexpired period   = (18 - 12) months = 6 months

4 0
3 years ago
Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the poll
vitfil [10]

Answer:

d. Firm A will spend $4,000.

Explanation:

Since Firm B cost of Cleanup before it gets the the river is less than the cost of pollution permits, it will choose to clean up its pollution.

However, since Firm A cleanup cost per ton ($100) is greater than the cost of the pollution permit, it will choose to buy permits.

Maximum Allowable Number of Permits=40

Therefore, Firm A will clean up 10 Tons and dump 40 Tons of Waste.

Cost =(10 Tons *$100)+(40 Tons * $75)

=$(1000+3000)

=$4000.

Firm A will spend $4000.

4 0
3 years ago
Read 2 more answers
Which of the following types of business ownership has the advantages of pass-through taxation and liability protection? A. A so
nikklg [1K]
Your answer is LLC so it would be B. IM writing this long because i have to 
4 0
4 years ago
Read 2 more answers
ABC reports dividends per share of $1.40 and net income for the year of $140,000. The current stock price is $14.00. What is ABC
Virty [35]

The ABC's dividend yield when the ABC reports dividends per share of $1.40 and net income for the year of $140,000. The current stock price is $14.00 is 10%.

<h3>What is yield?</h3>

The yield on a security is defined as the measurement of the ex-ante instrument to a safety holder in financing.

It is a cardinal part of the return on an investment, with some other being the change in the security's market price.

The formula of calculating the yield is:

\text{Dividend Yield} =\dfrac{ \text{Dividend Per Share}}{\text{Current Stock Price}} \times 100

According to the given information,

Dividend Per Share= $1.40,

Net Income= $1,40,000

Current Price= $14

Now, apply the formula in the given formula,

\text{Dividend Yield} =\dfrac{ \text{Dividend Per Share}}{\text{Current Stock Price}} \times 100\\\\\text{Dividend Yield} =\dfrac{1.40}{\$14}\times 100\\\\\text{Dividend Yield} =10\%

Therefore,  ABC's dividend yield is 10%.

Learn more about yield, refer to:

brainly.com/question/2506978

#SPJ1

5 0
2 years ago
A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to b
Galina-37 [17]

Answer:

The correct answer is $7,500

Explanation:

So, the hiring cost would be:

Hiring quater × hiring cost

= 300 × $20

= $6,000

Firing Cost would be:

Firing cost = 100 × $5

= $500

= 200 × $5

= $1,000

Therefore, the total hiring and firing cost = $6,000 + $500 + $1,000

= $7,500

7 0
3 years ago
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