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liubo4ka [24]
3 years ago
10

Alfred owned a term life insurance policy at the time he was diagnosed with a terminal illness. After paying $18,300 in premiums

, he sold the policy to a company that is authorized by the state of South Carolina to purchase such policies. The company paid Alfred $125,000. When Alfred died 18 months later, the company collected the face amount of the policy, $150,000.As a result on the sale of the policy, how much is Alfred required to include in his gross income?
Business
1 answer:
iVinArrow [24]3 years ago
3 0

Answer:

$0

Explanation:

Alfred paid in premiums = $18,300

company paid Alfred = $125,000

Alfred died after 18 months, then,

Company collected the face amount of the policy = $150,000

Sale of policy = [ company compensation - premium paid]

                       = $125,000 - $18,300

                       = $106,700

In this situation, Alfred receives the submission price from the insurance company consequential in profit.

There is no gain in the income of the insurance policy that is purchased by the Alfred for the long term.

That's why he is not required to include the amount of sale of policy i.e. $106,700.

Hence, Alfred required to include in his gross income will be zero ($0).

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Available Options Are:

a. Increasing ROIC by increasing return on sales

b. Decreasing ROIC by increasing return on sales

c. Decreasing ROIC by decreasing return on sales

d. Increasing ROIC by decreasing return on sales

Answer:

Option C. Decreasing ROIC by decreasing return on sales

Explanation:

The return on sales would be reduced as the research expenses have increased substantially. The implications of increased research expenses on the ROIC can be understood by analyzing the ROIC formula which is given as under:

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3 years ago
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This is an example of price discrimination
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2 years ago
Under what scenario could fiscal policy make a recession even worse?
mr Goodwill [35]

Answer:

The correct answer is letter "A": If tax cuts are not evenly distributed across income groups.

Explanation:

Fiscal policy refers to the combined governmental decisions regarding a country's taxing and spending. The term fiscal policy is associated with British economist John Maynard Keynes (<em>1883-1946</em>) who believed governments should influence macroeconomic productivity levels. Though, it could be a trap if it is <em>not allocated correctly among different income groups</em>. Economies such as Brazil, for instance, have allocated higher taxes for low-income people creating <em>economic disparity</em>.

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The following investment opportunities are available to an investment center manager: Project Initial Investment Annual Earnings
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Answer:

Instructions are listed below

Explanation:

Giving the following information:

Projects:

A

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B

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C

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D

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To find the present value of a perpetual annuity we need to use the following information:

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B= -100000 + (20000/0.16)= 25,000

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B= 100,000

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