Tim and Tammy Are Updating Their Financial Plan and Are

question 6

Multiple Choice

Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the easy method?

• A) $140,000
• B) $343,000
• C) $490,000
• D) $700,000
• E) $750,000

---

Definitions:

Inventory Turnover

A financial ratio indicating how many times a company has sold and replaced inventory over a period.

Current Ratio

It's a measure of a corporation's capability to meet its immediate financial obligations using its current assets.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity of the company.

Financial Ratios

Quantitative measures derived from a company's financial statements used to evaluate its financial performance and health.