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Which of the Following Statements Is (Are)true with Respect to Annuities

question 47

Multiple Choice

Which of the following statements is (are) true with respect to annuities?
I.Annuities are the opposite of life insurance.
II.The fundamental purpose of annuities is to replace lost income in case of premature death.


Definitions:

Contribution Margin Ratio

A financial ratio that measures the profitability of a product by subtracting variable costs from sales and dividing the result by total sales.

Operating Income

The profit realized from a business's operations after subtracting operating expenses from gross profit.

Fixed Costs

Expenses that do not change in proportion to the level of goods or services produced within a certain range.

Break-even Sales

The amount of revenue needed to cover total costs, both fixed and variable, with no profit or loss.

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