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inn [45]
3 years ago
12

wants to use the capital retention approach to determine how much life insurance to purchase. Robert would like to provide $35,0

00 per year to his family, forever, if he dies. The assets he owns today will provide $25,000 in annual income without the liquidation of these assets. If life insurance proceeds can be invested to earn a 5 percent annual return, how much life insurance should Robert purchase (if any) to fund the additional income needed to meet his $35,000 annual income goal
Business
1 answer:
Trava [24]3 years ago
7 0

Answer: $200,000

Explanation:

Robert's wants to provide $35,000 per year to his family after he dies

Amount which will be catered for by the asset he owns today = $25,000

Life insurance earns 5% annual return

The amount of life insurance which should be purchased ;

Amount required from insurance proceed:

$35, 000 - $25000 = $10000

If insurance earns 5% per annum;

Let Amount of life insurance bought = y

y * 5% = required amount from insurance

y * 0.05 = 10,000

0.05y = 10,000

y = 10000 ÷ 0.05

y = $200,000

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Answer:

The correct answer is letter "C": job hopping.

Explanation:

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3 0
3 years ago
KLM Corporation's quick assets are $6,123,000, its current assets are $13,440,000 and its current liabilities are $8,144,000. It
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Answer:

the acid-test ratio is 0.75 times

Explanation:

The computation of the acid-test ratio is shown below:

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3 years ago
5 Make versus buy, activity-based costing. The Svenson Corporation manufactures cellular modems. It manufactures its own cellula
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Answer:

See below

Explanation:

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Direct labor $45 per unit × 10,000 = $450,000

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Not avoidable $800,000

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Costs if CMCBs are purchased from Minton = ($300 × 10,000) + $800,000

= $3,000,000 + $800,000

= $3,800,000

It means that the cost of purchasing is $410,000 [ $3,390,000 - $3,800,000] higher than the cost of manufacturing.

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