Cheryl Purchased a Whole Life Insurance Policy Having a Face

question 139

Multiple Choice

Cheryl purchased a whole life insurance policy having a face value of $425,500 when she was 30 years old. Based on Table 19-3 from your text, what is the cash value of her policy if she is now 40 years old?

• A) $42,257
• B) $40,262
• C) $41,699
• D) $41,134

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Definitions:

Note Payable

A financial obligation represented by a written promissory note which specifies the amount and terms under which the money must be repaid.

Net Working Capital

A financial metric representing the difference between a company's current assets and current liabilities.

Change in Net Working Capital

The difference between the current assets and current liabilities from one period to the next, reflecting changes in liquidity and operational efficiency.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), representing the average tax burden.