According to Multiple of Earnings Method, the Rule of Thumb

question 164

Multiple Choice

According to multiple of earnings method, the rule of thumb used by many insurance agents is that your insurance coverage should be equal to 5 to 10 times your current income. For example, if you currently earn $70,000 a year, using the multiple of earning method then you need between:

• A) $300,000 and $700,000 life insurance
• B) $400,000 and $700,000 life insurance
• C) $390,000 and $800,000 life insurance
• D) $350,000 and $700,000 life insurance

Identify and calculate different methods of depreciation for tangible assets.

Recognize and report the accumulated depletion and depreciation on the balance sheet.

Understand the role of residual value in the calculation of depreciation and its impact on the asset's book value.

Calculate depletion expense based on the usage of natural resources.

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Definitions:

Mania

A mental state characterized by excessively high energy levels, euphoria, and impulsiveness, often seen in bipolar disorder.

Antisocial Conduct

Behavior that goes against the norms of society, often violating the rights of others, possibly indicative of antisocial personality disorder.

Internal States

Refers to an individual's psychological and physiological condition at any given time, including emotions, thoughts, and body sensations.

External Behaviors

Observable actions or reactions of individuals in response to external stimuli.