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ss7ja [257]
2 years ago
11

Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, participating policy (dividends will be used to bui

ld up the cash value of the policy). Your annual premium is $1,000. The cash value of the policy is expected to be $12,000 in 15 years. Using time value of money and assuming you could invest your money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. Use Exhibit 1-B. (Do not round intermediate calculations. Round time value factor to 3 decimal places and final answer to the nearest whole number.)
Business
2 answers:
taurus [48]2 years ago
8 0

Answer:

The Net cost of insurance $13,129.

Explanation:

Annual premium (15 years) $15,000 ($1,000 × 15 years)

Time value of money

$1,000 × 25.129 = $25,129 (Exhibit 1-B, 15 years, 7%)

+$10,129 ($25,129 - 15,000)

Total cost of policy $25,129 ($15,000 + 10,129)

Cash value (end of 15 years) -$12,000

Net cost of insurance $13,129 ($25,129 - 12,000)

At a 7 percent annual yield, your account would have accumulated to $25,129 in 15 years. You have paid $13,129 for 15 years of insurance protection.

aalyn [17]2 years ago
6 0

Answer:

13,129

Explanation:

We will compare the end value of the policy with the future value of the premiums as moeny has a value over time of 7%

<em><u>Future Value of the premiums at year 10th if they were invested elsewhere:</u></em>

C \times \frac{1-(1+r)^{-time} }{rate} = FV\\

C 1,000.00

time 15

rate 0.07

1000 \times \frac{1-(1+0.07)^{-15} }{0.07} = FV\\

FV $25,129.0220

Salvage value of the policy if not exercise: 12,000

We "renounce" to 25,129 dollars for not investing the cash but we receive 12,000 therefore, the net value is the difference:

25,129 - 12,000 = 13,129

It cost 13,129 to get the insurance.

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A price-discriminating firm charges the lowest price to the group that
Sphinxa [80]

Answer: price-discriminating firms charge more price from the group that has less price elasticity of demand than the group that has more elastic demand

Explanation:

Means, the group that does not decrease their demand as the price goes up. Price discriminating firms charge more price from such groups. Let me explain more that what price discriminating firms are.

These are the firms that charge different prices for similar and identical good from different groups.

5 0
3 years ago
Mark the following statements that are TRUE.
motikmotik

Answer:

a. A counterfeit is an imitation of the genuine money, created with the intent to defraud.

  • TRUE

U.S. Currency was originally printed on blue paper.

  • FALSE: THE DOLLAR HAS ALWAYS BEEN GREEN

b. The First bank of the United States was started in 1888.

  • FALSE: THE (FIRST) BANK OF THE UNITED STATES WAS ESTABLISHED IN 1791

c. The French unit of money is the dollar.

  • FALSE: THE EURO IS THE OFFICIAL CURRENCY IN FRANCE

d. A euro is the Australian unit of money.

  • FALSE: EUROS ARE THE OFFICIAL CURRENCY OF THE EUROPEAN UNION.

In 1945 $10,000 bills were discontinued for public use by the Board of Governors of the Federal Reserve System.

  • TRUE

4 0
3 years ago
Cellular respiration is a complex process but you can think of it as a change machine. You have a $10 bill but, at the arcade, a
Oksana_A [137]

Answer:

Explanation: Cellular respiration is the process of breaking down sugar to give energy.  It can also be said to be the process of takes in food thereafter  using the food taken in it to create ATP (a chemical which the cell uses for energy).

This process starts when a glucose molecule(from consumed food) is converted into carbon dioxide and how its energy is harvested as ATP.

It involves 4 steps which are:

1. Glycolysis: Here, glucose undergoes a chemical transformation which at the end is converted to molecules of pyruvate.

2. Pyruvate Oxidation: At this step the pyruvate produced from glucose above is converted into a two-carbon molecule to Coenzyme A, known as acetyl CoA. Here carbon dioxide is produced as well.

3. Citric acid cycle: At this step, the acetyl CoA produced above combines with a four-carbon molecule and goes through a cycle of reactions. This reactions produces four carbon starting molecules which are: ATP, NADH, FADH 2 and carbon dioxide.

4. Oxidative phosphorylation: Here, the molecules produced above  NADH, FADH 2 deposit their electrons in the electron transport chain thereby releasing energy. At the end of the electron transport chain, oxygen accepts electrons and takes up protons to form water.

​

7 0
3 years ago
A type of coverage with a small face amount, typically purchased to pay the burial expenses of the insured, is called a(n) _____
Katarina [22]

Correct Question: A type of coverage with a small face amount, typically purchased to pay the burial expenses of the insured, is called a(n) _________ plan:

A. Family

B. Industrial

C. Interment

D. Annuity

Answer:

B. Industrial

Explanation:

Also called a pre need insurance, industrial insurance is the type of insurance that is procured to take care of future occurrence such as burial.

7 0
3 years ago
Kitsure, a cosmetics company, was able to sell 20 percent more than its estimated sales in a year. The company was able to acqui
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Answer:

D. Profitability Ratios

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A profitability ratios are class of ratios that are used by investors, share holders and other stake holders of the company to access the business ability to generate profits and returns relative to its revenue, expenses and other associated costs.

Most common Profitability ratios are

  • Gross profit margin
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whereas:

Leverage ratio shows the company's debt level.

Asset management ratio tells how well the company is utilizing its assets to generate sale.

Liquidity ratios shows how much liquid assets or the company position to pay off its current liabilities falling due.  

8 0
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