Assume That at Retirement You Have Accumulated $500,000 in a Variable

question 15

Multiple Choice

Assume that at retirement you have accumulated $500,000 in a variable annuity contract.The assumed investment return is 6%, and your life expectancy is 15 years.What is the hypothetical constant-benefit payment?

• A)$30,000.00
• B)$33,333.33
• C)$51,481.38
• D)$52,452.73

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Definitions:

Average Collection Period

The ratio of accounts receivable to daily sales. Also called days’ receivables.

Financial Statements

Documents that report the financial activities and condition of a business or entity, including the balance sheet, income statement, and cash flow statement.

After-Tax Profit Margin

A profitability ratio calculated by dividing net income after taxes by net sales, showing what percentage of sales translates into profits after all expenses.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in using its assets to generate revenue, calculated by dividing total revenue by average assets.