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SpyIntel [72]
3 years ago
12

The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $25,000 per year fo

rever. If the required return on this investment is 5.8 percent, how much will you pay for the policy
Business
1 answer:
Sati [7]3 years ago
4 0

Answer:

the amount that should be paid for the policy is $431,034.48

Explanation:

The computation of the amount that should be paid for the policy is given below:

Present value of perpetual cash flow = Perpetual cash flow ÷ Rate of return

= $25,000 ÷ 5.8%

= $431,034.48

Hence, the amount that should be paid for the policy is $431,034.48

The same should be considered and relevant

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Answer:

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Operating income represents profit realized in carrying out Hale Company primary activities

Only expenses incurred in are considered in calculation of Hale`s Operating Income

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Total Expenses                               57000

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