The Preferred Technique for Determining How Much Life Insurance Coverage

question 84

Multiple Choice

The preferred technique for determining how much life insurance coverage is needed for an individual is to:

• A) compute the human life value.
• B) use the probability of death each year, prevailing interest rates, and assumed inflation rates to find the discounted present value of a future income stream.
• C) assess the family's total economic needs and subtracting the financial resources that would be available after death to meet those needs.
• D) estimate the sum of money which, when paid in installments, will produce the same income as the person would have earned after deducting assumed amounts for taxes and personal maintenance expenses.
• E) use the multiple-of-earnings method adjusted for occupation.

Understand the importance and calculation of the asset turnover ratio.

Differentiate between the periodic and perpetual inventory systems in terms of operational functionality.

Comprehend the process of recording the sale and return transactions under the perpetual inventory system.

Understand credit terms and their implications for financial transactions.

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Definitions:

"Staying" Power

"Staying" power refers to the ability of a person, organization, or product to endure or remain popular over a significant period of time.

Frozen Meal

A pre-cooked, packaged meal that is frozen and can be reheated for consumption, offering convenience and a quick meal option.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for slight differentiation and some price control.

Elasticity

A measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants.