You are the wage earner in a "typical family" with $40,000 gross annual income. Use the easy method to determine howmuch insurance you should carry. Insurance needYou are the wage earner in a "typical family" with $40,000 gross annual income. Use the easy method to determinehow much insurance you should carry.Insurance need

In this question, we are required to determine the insurance amount needed by the easy method.

Answered: You are the wage earner in a "typical…

You are the wage earner in a "typical family" with $40,000 gross annual income. Use the easy method to determine how much insurance you should carry. Insurance need

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter9: Insuring Your Health

Section: Chapter Questions

Problem 8FPE

See similar textbooks

Related questions

Q: Summit Record Company is negotiating with two banks for a $134, 000 loan. Fidelity Bank requires a…

A: Given,Loan Amount = $134,000Fidelity Bank = 18%Southwest Bank = 9%Stated Rate for both Banks = 12%

Q: Esfandairi Enterprises is considering a new three-year expansion project that requires an initial…

A: NPV net present value is the capital budgeting technique used to evaluate the capital investment…

Q: Thanks to acquisition of a key patent, your company now has exclusive production rights for…

A: Net present value refers to the method of capital budgeting used for estimating the viability of the…

Q: You have received price quotations for the new photoreactor to be implemented to the production…

A: EUAC is the unifrom equivalent annual cost in which all cost are included in that including cost of…

Q: As a bond fund manager, you are considering corporate bonds issued by Super Buy (SB). Each SB bond…

A: The current worth of the cash flows will be computed using the current interest rate and then the…

Q: What is the difference bet

A: There are many types of traders in the market and each trader has their own objective in the market…

Q: Required information On January 1, 2024, Avalanche Corporation borrowed $102,000 from First Bank by…

A: Net effect on earnings describes the increase in the retained earnings in the balance sheet under…

Q: Compute the debt to credit ratio for a young man name John. He currently has a $15,000 car loan,…

A: Debt to credit ratio is to be calculated by taking the amount of total debt as the numerator and the…

Q: On January 1, 2023, Shamrock Corporation purchased a newly issued $1,400,000 bond. The bond matured…

A: Bond price - The price of a bond is that amount which is equal to the sum of the present value of…

Q: Future value and present value concepts are applied in various ways, such as calculating growth…

A: The growth rate for 1934-1936 was The growth rate for 1936-1939 was The growth rate for 1934-1939…

Q: 5. A U.S. firm expects a receivable (cash inflow) of €1,000,000 in six months. The current exchange…

A: Expected cash inflow $ 10,00,000.00…

Q: You are considering purchasing a stock that is expected to pay a dividend of $6 at the end of the…

A: When the company receives profits and distributes them among the shareholders. The share of profit…

Q: ABX Sdn Bhd. expects EBIT of RM2,000,000 for the coming year. The firm’s capital structureconsists…

A: The objective of the question is to calculate the expected dividend payout ratio for ABX Sdn Bhd.…

Q: You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that…

A: The cash flows of a project include (1) initial investment (2) operating cash flows and (3) terminal…

Q: What are the factors affecting Investment Decisions and Financing Decisions?

A: Investment decisions and financing decisions are critical aspects of financial management for…

Q: Sarah and James Hernandez purchased 320 shares of Macy’s stock at $15 a share. One year later, they…

A: Variables in the question:No. of shares=320Purchase price per share=$15Sale price per share=$35…

Q: Management of Drake Awesomeness, Inc., is currently evaluating three projects that are independent.…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Which of the following is sometimes called a currently attainable standard? O a.par b.normal…

A: In this question, we are required to determine the standard which is sometimes known as currently…

Q: a. What was your net profit per unit if you had purchased the call option? Use a minus sign to enter…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Project the annual free cash flows (FCF) of buying the chains. The annual free cash flows for years…

A: Net Present Value (NPV) is a financial concept widely used in investment analysis and capital…

Q: Arnold Inc. is considering a proposal to manufacture high-end protein bars used as food supplements…

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…

Q: Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm…

A: Answer-aStock…

Q: (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 Year 2 Year 3…

A: Generally, net present value having a positive value helps in reflecting the wealth generation by…

Q: "The FIN340 Company has a WACC of 10% and is evaluating a project with the following projected…

A: The internal rate of return is the amount of money a project makes back within a given time frame to…

Q: Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D₁- $2.50), the dividend is…

A: The weighted average cost of capital (WACC) of a firm is a financial metric used to calculate the…

Q: You need $24,856 at the end of nine years, and your only investment outlet is a 10 percent long-term…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: A proposed project has fixed costs of $41,000 per year. The operating cash flow at 10,000 units is…

A: Degree of operating leverage measures the change in operating income by change in in sales. In above…

Q: Earnings (net income) Preferred stock (12,400 shares at $50 par, 4%) Common stock (44,600 shares no…

A: 1. Earnings per share (EPS) is a measure of a company's profitability, calculated by dividing net…

Q: Suppose S = $96, K = $100, u = 1.03, d = 0.97, and R = 1.02. The risk-neutral probability, q, that…

A: In this question, we are required to determine the risk-neutral probability.

Q: Subway, with more than 27,000 outlets in the U.S., is planning for a new restaurant in Buffalo, New…

A: Total weighted score is a calculated value that combines individual scores assigned to different…

Q: Waller Company paid a $0.150 dividend per share in 2000, which grew to $0.324 in 2012. This growth…

A: First we have to calculate the growth rate

Q: Your broker recommends that you purchase Good Mills at $34. The stock pays a $2.20 annual dividend,…

A: Intrinsic value of the stock = Dividend per share(1+growth rate) / required rate of return - growth…

Q: Toyota Motor Corporation has faced tough times after losing production due to natural disasters.…

A: Notes promise to the bearer of the note the promised amount with interest on the specified date and…

Q: Colsen Communications is trying to estimate the first-year net operating cash flow (at Year 1) for a…

A: Operating cash flows (OCF) is the cash flows generated from normal operations- Selling and producing…

Q: A company is thinking to sell an asset since it will be replaced by a higher capacity one. The…

A: There will be tax liabilities if there is profit on sale of asset.There will be tax shield if there…

Q: suppose lender larry values $1 today equal to $2 a month from now, and borrower barry vlaues $1…

A: The Fisher Equation, named after economist Irving Fisher, states the relationship between nominal…

Q: If the first payment into the fund occurs today, what amount will be in the fund in 20 years? If the…

A: Future value can be calculated usingFV (rate, nper, pmt, [Pv], [type])Rate The interest rateNper…

Q: Hui purchased US$11,000 from a bank in America, which charged him a commission of 0.6%, and sold the…

A: The exchange rates are the rates at which one currency can be traded with another currency to make…

Q: lory Tech Corporation's stock has a required return of 13.00 %, the risk- free rate is 5.00%, and…

A: CAPME(ri) = Rf + Bi * (E(Rm) - Rf)E(ri) = Expected returnRf = Risk free rateBi = BetaE(Rm) =…

Q: Explain in detail the Investment decision, Financing decision and divdend decision.

A: Investment decisions involve choosing where to allocate a company's capital to generate future…

Q: Industrial Industries is considering opening a new 5 year project. The project will require…

A: IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…

Q: Johnny Corporation is evaluating a project with the following cash flows: Year 1, 2, 3, 4, 5. Cash…

A: MIRR stands for the modified internal rate of return. It is an important capital budgeting metric.…

Q: Problem 17-7 Spreadsheet Problem: Dividends Set Annually (LG17-4) Suppose that a firm always…

A: "stock worth" means the market price of a company's share of stock. To know the stock's value and…

Q: Working as an investment analyst for a fund that invests in fixed-income assets, you are tasked with…

A: Solution:-Bond price means the price at which a bond is trading in the market. It is the summation…

Q: Procter and Gamble (PG) paid an annual dividend of $2.78 in 2021. You expect PG to increase its…

A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Q: e company issues 7.4%, 5-year bonds with a total face amount of $100,000. The market interest rate…

A: Price of bond is the present value of coupon payments plus the present value of the par value of the…

Q: Richard Rambo presently owns the Marine Tower office building, which is 20 years old, and is…

A: In this question, Richard Rambo owns the Marine Tower office building, which is 20 years old, and…

Q: dering Projects ver company has lost investment information for Project period for both projects are…

A: Payback period is the period required to recover initial cash flow of the project and is one simple…

Q: Modern Artifacts can produce keepsakes that will be sold for $90 each. Nondepreciation fixed costs…

A: Variables in the question:Selling price =$90 eachNon-depreciation fixed cost=$1100Variable costs=$65…

Q: Hastings Corporation is interested in acquiring Vandell Corporation, Vandell has 1 million shares…

A: The funds available to company to repay its creditors or to pay the dividends and the interest to…

Question

You are the wage earner in a "typical family" with $40,000 gross annual income. Use the easy method to determine how
much insurance you should carry. Insurance need
You are the wage earner in a "typical family" with $40,000 gross annual income. Use the easy method to determine
how much insurance you should carry.
Insurance need

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Requirements of the question and the values we have to determine

VIEW

Step 2: Now, we will calculate the insurance amount needed

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You are the wage earner in a "typical family," with $28,000 gross annual income. Use the easy method to determine how much life insurance you should carry. (Do not round intermediate calculations.) Life insurance need
Assume that you have calculated: (a) premiums for life insurance policies and (b) payments to annuitants based upon an assumption that everybody dies before attaining age 101. Now you discover that a significant number of your policy owners are likely to live beyond age 101 and some will live to age 121. How will that affect your business?
You are the sole wage earner in a "typical family," with $102,000 gross annual income. Use the income replacement method to determine how much life insurance you should carry. (Omit the "$" sign In your response.) Value of Insurance $
You have a gross annual income of $62,500. Use the multiple of income method to determine the minimum amount of life insurance you should carry. Answer is complete but not entirely correct. Minimum insurance need $ 437,500 x
Which of the following people is to have the highest auto insurance premium?
Consider a worker, Janice, who has the option to purchase DI (disability insurance) on the private market. Janice becomes disabled with probability q = 0.01. She can purchase DI by paying the premium р. If the Janice is disabled, she will earn no income. But if she is insured, she will receive a total payment of $15,000 from the insurance company (her consumption will be $15,000). If the Janice is not disabled, she earns an income of $20,000. She has utility: U = 3C3 where C is the amount of consumption. Determine the actuarially fair insurance premium, p". Write down the expected utility function for Janice if she purchases insurance at the actuarially fair price. Will Janice choose to purchase this disability insurance? Explain. What is the most she would be willing to pay for DI insurance?
4. How do insurance companies determine how much you should pay for your insurance coverage?
How much money will a patient using this insurance plan have to pay for a $4200 medical bill?
Doc White gave you a rough "rule of thumb" for determining your life insurance needs, based on your annual salary Assume that Pete has an annual salary of $80,000. What is the rough range of life insurance coverage that Pete should have according to this rule? A. $400,000 to $800,000 OB. $400,000 to $480,000 OC. $160,000 to $480,000 OD. $160,000 to $800,000
10. The reasons of buying life insurance are: i. To ensure immediate family members are able to maintain the same standard of living upon the demise of the breadwinner ii. To ensure the policyholder has extra income when his earnings are reduced due to serious illness or accident iii. To finance children education iv. To have a saving plan for the future and have a constant source of income upon retirement A. i and ii B. i,ii and iii C. i,i and iv D. All of the above
Julia pays $500 for an insurance policy with anexpected value of $120. Explain why this is a rational choice for Julia
In the context of the health insurance and the life insurance, choose the sentence that IS NOT CORRECT: * The deductible in a health insurance is an amount of money the insured must pay before benefits become payable by the insurance company. When we buy a health insurance, we should make sure that we have enough insurance (the opportunity cost of not being adequately insured can be extremely high), but without wasting money by overinsuring Group Health Insurance (most of them being employer sponsored) represents a small percentage (around 5%) of all health insurance issued by health and life insurance companies. In a life insurance, a person purchases a policy by paying a premium and the insurance company promises to pay a sum of money at the time of the policyholder’s death to the designated beneficiary.