As a rule of thumb, insurance coverage should equal A. 6 to 10 times annual income....
As a rule of thumb, insurance coverage should equal
A. 6 to 10 times annual income.
B. 6 to 10 times net worth.
C. 6 to 10 times monthly income.
D. 6% to 10% of expected annual retirement income.
Homework Answers
Option A 6 to 10 times annual income. the person getting insured has to calculate on his own the amount he wants make available to spouse at the time of death, if such basis cannot be formed they use the rule of 6 to 10 times of annual income.
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As a rule of thumb, insurance coverage should equal
A. 6 to 10 times annual income....
Joe and Maggie have life insurance through their employers equal to two times their annual salaries,...
Joe
and Maggie have life insurance through their employers equal to two
times their annual salaries, joe, age 37, has an annual salary of
$56,000 and Maggie, age 34, has an annual salary of $59,000. the
annual cost of the group term insurance is $20 for each employee?
Table 1 Rates for Group Term Insurance:
5-year age bracket | Cost/$1,000 insurance for
1 month period
Under 25
$0.05
25 to 29
$0.06
30 to 34
$0.08
35 to 39
$0.09...
Impact of including equity earnings from the coverage? Why should equity income be excluded from the...
Impact of including equity earnings from the coverage? Why should equity income be excluded from the times interest earned coverage P 7-9 Allen Company and Barker Company are competitors in the same industry financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Allen Company Barker Company Cash $ 10,000 $ 35,000 Accounts receivable 45,000 120,000 Inventory 70,000 190,000 Investments 40,000 100,000 Intangibles 11,000 20,000 180,000 520,000 Property, plant, and equipment $356,000 Total assets $985,000 (continued) Term Debt-Paying...
c. What is the impact of incl income be excluded from the times interest earned coverage?...
c. What is the impact of incl income be excluded from the times interest earned coverage? P 7-9 Allen Company and Barker Company are competitors in the same industry. Selected financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Barker Company Allen Company $ 35,000 120,000 190,000 100,000 20,000 520,000 $985,000 10,000 45,000 70,000 40,000 11,000 180,000 $356,000 Cash Accounts receivable Inventory Investments Intangibles Property, plant, and equipment Total assets (continued) (P 7-9 CONTINUED) Allen Company Barker...
Use the table to answer the question. The sample life insurance premium table illustrates the monthly premium for every $25,000 of coverage. Age Nonsmoker Male Nonsmoker Fe male Smoker Male Smo...
Use the table to answer the question. The sample life insurance premium table illustrates the monthly premium for every $25,000 of coverage. Age Nonsmoker Male Nonsmoker Fe male Smoker Male Smoker Female Under 24 $3.00 24 to 30 $4.00 31 to 40 $5.50 41 to 50 $7.50 $2.50 $3.50 $4.40 $6.75 $4.50 $6.15 $9.00 $13.00 $4.00 $5.25 $6.50 $12.00 What is the insurance premium for a 42-year-old nonsmoking female who wants $125,000 in coverage? O A. $33.75 O B. $41.50...
The de minimis rule allows a taxpayer to disregard foreign base company income and adjusted gross insurance income if wh...
The de minimis rule allows a taxpayer to disregard foreign base company income and adjusted gross insurance income if which of the following conditions is satisfied? A) Either one is less than $10 million or 15 percent of the corporation's gross income B) The combined total of the two is less than $5 million or 1 percent of gross income C) The combination of the two is less than the lesser of $1 million or 5 percent of the CFC's...
Ultimately, the annual income the investor should be most interested in is: A. Potential gross income...
Ultimately, the annual income the investor should be most interested in is: A. Potential gross income B. Net operating income C. After-tax cash flow D. Before-tax cash flow E. None of the above
Mr. Donald Heffernan, a 35 years old account manager At Wells Fargo has gross annual income...
Mr. Donald Heffernan, a 35 years old account manager At Wells Fargo has gross annual income after all deductibles of $85,000. Mrs. Heffernan quit her job at Walmart to take care of their twin kids, Luke and Christine. So Mr. Heffernan is the only income earner at his house hold. Mr. Heffernan is filing income using the following "Married filing jointly" tax rate schedule. Taxable income over Not over Tax rate $0 18,450 10% 18,451 74,900 15% 74,901 151,200 25%...
Insurance coverage relies on 1. the law of large numbers, meaning Events that are statistically difficult...
Insurance coverage relies on 1. the law of large numbers, meaning Events that are statistically difficult to predict for a specific individual are more predictable for a large number of individuals b. Events that are statistically difficult to predict for a large number of individuals a. predictable are more individual. for an Insurers can statistically predict whether an individual will suffer a loss more accurately than they statistically predict whether a large number of individuals will suffer losses. d. C....
You are the beneficiary of a life insurance policy. The insurance company offers two options for...
You are the beneficiary of a life insurance policy. The insurance company offers two options for receiving the proceeds: a lump sum of $50,000 today or payments of $550 a month for ten years. If you can earn 6 percent, compounded monthly, which option should you take and why? a. You should accept the lump sum because the payments are only worth $49,540.40 today. b. You should accept the payments because they are worth $51,523.74 today. c. You should accept...
Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR...
Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS COMPANY Sales Cost of goods sold Gross profit Selling and administrative expense Lease expense Operating profit* Interest expense Earnings before taxes Taxes (30%) Earnings after taxes *Equals income before interest and taxes. $266,000 161,000 $105,000 46,400 13,300 $ 45,300 7,300 $ 38,000 15, 200 $ 22,800 a. Compute the interest coverage ratio. (Round your answer to 2 decimal places.) Interest coverage times...
Joe
and Maggie have life insurance through their employers equal to two
times their annual salaries, joe, age 37, has an annual salary of
$56,000 and Maggie, age 34, has an annual salary of $59,000. the
annual cost of the group term insurance is $20 for each employee?
Table 1 Rates for Group Term Insurance:
5-year age bracket | Cost/$1,000 insurance for
1 month period
Under 25
$0.05
25 to 29
$0.06
30 to 34
$0.08
35 to 39
$0.09...
Impact of including equity earnings from the coverage? Why should equity income be excluded from the times interest earned coverage P 7-9 Allen Company and Barker Company are competitors in the same industry financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Allen Company Barker Company Cash $ 10,000 $ 35,000 Accounts receivable 45,000 120,000 Inventory 70,000 190,000 Investments 40,000 100,000 Intangibles 11,000 20,000 180,000 520,000 Property, plant, and equipment $356,000 Total assets $985,000 (continued) Term Debt-Paying...
c. What is the impact of incl income be excluded from the times interest earned coverage? P 7-9 Allen Company and Barker Company are competitors in the same industry. Selected financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Barker Company Allen Company $ 35,000 120,000 190,000 100,000 20,000 520,000 $985,000 10,000 45,000 70,000 40,000 11,000 180,000 $356,000 Cash Accounts receivable Inventory Investments Intangibles Property, plant, and equipment Total assets (continued) (P 7-9 CONTINUED) Allen Company Barker...
Use the table to answer the question. The sample life insurance premium table illustrates the monthly premium for every $25,000 of coverage. Age Nonsmoker Male Nonsmoker Fe male Smoker Male Smoker Female Under 24 $3.00 24 to 30 $4.00 31 to 40 $5.50 41 to 50 $7.50 $2.50 $3.50 $4.40 $6.75 $4.50 $6.15 $9.00 $13.00 $4.00 $5.25 $6.50 $12.00 What is the insurance premium for a 42-year-old nonsmoking female who wants $125,000 in coverage? O A. $33.75 O B. $41.50...
Mr. Donald Heffernan, a 35 years old account manager At Wells Fargo has gross annual income after all deductibles of $85,000. Mrs. Heffernan quit her job at Walmart to take care of their twin kids, Luke and Christine. So Mr. Heffernan is the only income earner at his house hold. Mr. Heffernan is filing income using the following "Married filing jointly" tax rate schedule. Taxable income over Not over Tax rate $0 18,450 10% 18,451 74,900 15% 74,901 151,200 25%...
Insurance coverage relies on 1. the law of large numbers, meaning Events that are statistically difficult to predict for a specific individual are more predictable for a large number of individuals b. Events that are statistically difficult to predict for a large number of individuals a. predictable are more individual. for an Insurers can statistically predict whether an individual will suffer a loss more accurately than they statistically predict whether a large number of individuals will suffer losses. d. C....
Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS COMPANY Sales Cost of goods sold Gross profit Selling and administrative expense Lease expense Operating profit* Interest expense Earnings before taxes Taxes (30%) Earnings after taxes *Equals income before interest and taxes. $266,000 161,000 $105,000 46,400 13,300 $ 45,300 7,300 $ 38,000 15, 200 $ 22,800 a. Compute the interest coverage ratio. (Round your answer to 2 decimal places.) Interest coverage times...
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