Reference no: EM133205313
Rob, 52 is a construction worker earning $95,000 gross per year. His wife, Monica, 52, is a nurse earning $90,000 gross per year. They have a 15-year old daughter and a 19-year old son. Rob and Monica expect the children to be financially independent in 10 years.
Rob and Monica intend to work until they are 67 years old. If one of the couple dies, the other will continue to work at the same job and earn the same income.
The family currently spends $112,000 per year including all debt and mortgage payments. If one of the couple dies, the annual spending on expenses will fall to $95,000 per year till the children are financially independent. Then the annual spending on expenses will fall to $75,000 per year till retirement.
Rob and Monica have a joint-first to die, term life insurance policy with a face value of $300,000 and ten years until maturity.
Assumptions:
- 40% of expenses till children are financially independent needs to be insured.
- 20% of expenses after children are financially independent till retirement needs to be insured.
- Family will continue to live in the home after one of the couple dies.
- Funeral expenses $20,000.
- Payments are at the beginning of the period.
- Real after-tax interest rate of 2% p.a.
Ignore CPP pension and benefits in this question.
Required:
- Identify two risks that Rob and Monica are exposed to and explain why they are risks and how the risks you have identified impact their personal finances?
- What is the amount of life insurance needed if Rob dies today using the Expense Approach?
|
How carter estate will be distributed upon his passing
: Evelyn and Carter have been married for 46 years. They are in their retirement and have 2 kids that are financially independent. They have five grandchildren, a
|
|
Compute the cost of finished goods manufactured
: During year company started an completed 50 motor homes at a cost of 60,000 per unit. Compute the cost of finished goods manufactured
|
|
How is risk factored into the ebit-eps analysis
: How is risk factored into the EBIT-EPS analysis? What are basic shortcomings of EBIT's analysis ? Discuss WACC what is it, how is it calculated, why is it used?
|
|
What is shermans current predicament
: What is Sherman's current predicament and how did it come about? Thoughtfully evaluate her current actions to the point identified in the case
|
|
Identify two risks that rob and monica are exposed
: Rob, 52 is a construction worker earning $95,000 gross per year. His wife, Monica, 52, is a nurse earning $90,000 gross per year.
|
|
Evaluate the contributions each of your team members
: Team Peer Evaluation Essay - Evaluate the contributions each of your team members have made to the marketing plan that is due in this unit
|
|
Create new dialogue between them about what they have learn
: Imagine, both have read/learn the same information you have read in this unit. Create a new dialogue between them about what they (you) have learned.
|
|
Explain the property division under ontario law
: Mike and Vanessa separated June 15, 2021. Vanessa has come to you for assistance in determining how their assets will be divided.
|
|
Calculate the select financial ratios for the fiscal year
: Two-Rivers Inc. (TRI) manufactures a variety of consumer products. Calculate the select financial ratios for the fiscal year Year 2
|