Which of the Following Is Most Likely to Need and Be

question 71

Multiple Choice

Which of the following is most likely to need and be able to obtain a long-term care policy?

• A) Mike is 35,in excellent health,single and makes $56,000 per year.
• B) Clare is 47,in poor health (cancer),married and makes $27,000 per year.
• C) Gail is 78,has been diagnosed with senile dementia,and is retired with a net worth of $500,000.
• D) Steve is 56,in good health,makes $75,000 per year and has a net worth of $750,000.
• E) Ava is 63,married,makes $73,000 per year and has a net worth of $4,000,000

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Definitions:

Residual Income

The net income an investment or business venture generates above the minimum rate of return.

Minimum Required Rate

The lowest return rate that an investor or project manager would accept for an investment.

Residual Income

Income that remains after all costs and expenses, including minimum required return on investment, have been subtracted.

Operating Assets

Long-term assets used in the operations of a business, including property, plant, and equipment, that generate income.