The Johnsons Change Their Life Insurance Coverage Harry and Belinda Johnson spend S20 per month on life insurance in the form of a premium on a $10,000 paid-at-65 cash-value policy on Harry that his parents bought for him years ago. Belinda has a group term in surance policy from her employer with a face amount of S200,000. By choosing a group life insurance plan from his menu of employee benefits, Harry now has $100,000 of group term life insurance. Harry and Belinda have decided that, because they have no children, they could reduce their life insurance needs by protecting one an- other's income for only four years, assuming the sur- vivor would be able to fend for himself or herself after that time. They also realize that their savings fund is so low that it would have no bearing on their life insurance needs. Harry and Belinda are basing their calculations on a projected 4 percent rate of return after taxes and infla- tion. They also estimate the following expenses: $15,000 for final expenses, $20,000 for readjustment expenses, and S5,000 for repayment of short-term debts. (a) Should the $3,000 interest earnings from Harry's trust fund be included in his annual income for the purposes of calculating the likely dollar loss if he were to die? (See the discussions about the Johnsons in ChapterI beginning on page 34.) Explain your response (b) Based on your response to the previous question, how much more life insurance does Harry need? Use the Run the Numbers worksheet on page 366 to arrive at vour answer (c) Repeat the calculations to arrive at the additional life insurance needed on Belinda's life (d) How might the Johnsons most economically meet any additional life insurance needs you have determined they may have
Answers: 2
Business, 22.06.2019 12:00, elianagilbert3p3hh63
Areal estate agent is considering changing her cell phone plan. there are three plans to choose from, all of which involve a monthly service charge of $20. plan a has a cost of $.42 a minute for daytime calls and $.17 a minute for evening calls. plan b has a charge of $.52 a minute for daytime calls and $.15 a minute for evening calls. plan c has a flat rate of $80 with 275 minutes of calls allowed per month and a charge of $.38 per minute beyond that, day or evening. a. determine the total charge under each plan for this case: 150 minutes of day calls and 70 minutes of evening calls in a month. (do not round intermediate calculations. round your answer to 2 decimal places. omit the "$" sign in your response.)c. if the agent will use the service for daytime calls, over what range of call minutes will each plan be optimal? (round each answer to the nearest whole number. include the indifference point itself in each answer.)d. suppose that the agent expects both daytime and evening calls. at what point (i. e., percentage of total call minutes used for daytime calls) would she be indifferent between plans a and b?
Answers: 1
Business, 22.06.2019 20:00, enriqueliz1680
Beranek corp has $720,000 of assets, and it uses no debt--it is financed only with common equity. the new cfo wants to employ enough debt to raise the debt/assets ratio to 40%, using the proceeds from borrowing to buy back common stock at its book value. how much must the firm borrow to achieve the target debt ratio? a. $273,600b. $288,000c. $302,400d. $317,520e. $333,396
Answers: 3
Business, 22.06.2019 20:40, ninjaben
On january 1, 2017, pharoah company issued 10-year, $2,020,000 face value, 6% bonds, at par. each $1,000 bond is convertible into 16 shares of pharoah common stock. pharoah’s net income in 2017 was $317,000, and its tax rate was 40%. the company had 97,000 shares of common stock outstanding throughout 2017. none of the bonds were converted in 2017. (a) compute diluted earnings per share for 2017. (round answer to 2 decimal places, e. g. $2.55.) diluted earnings per share
Answers: 3
The Johnsons Change Their Life Insurance Coverage Harry and Belinda Johnson spend S20 per month on l...
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