All of the Following Are True of the Income Method

question 89

Multiple Choice

All of the following are true of the income method of determining life insurance needs except it

• A) is easy to use.
• B) does not consider your age.
• C) factors in the number of children in your family.
• D) doesn't figure in savings or investments.

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Definitions:

Interest Coverage

A financial metric used to determine how easily a company can pay interest expenses on outstanding debt with its before-tax income.

Quick Ratios

A liquidity metric that measures a company's ability to cover its current liabilities with its most liquid assets, excluding inventory.

Obsolete Inventory

Items that can no longer be sold due to outdating, changes in market demands, or deterioration, often leading to their removal from inventory at a loss.

Current Ratio

A financial metric illustrating a firm's capacity to cover its short-term debts within a year, determined by dividing current assets by current liabilities.