What face value of life insurance

Assignment Help Financial Management
Reference no: EM131555052

Anne and Mark have decided that they would each need $25,000 annually over a 7 year period to cover income replacement in the event of the death of either Anne or Mark. Anne and Mark do NOT participate in Social Security. Based only on these income replacement needs, what face value of life insurance is needed for both Anne and Mark (just calculate for one-they both have the same need)? Assume that Anne and Mark have no other resources to put toward this need and that they would invest the life insurance proceeds in an account returning a 4% real annual rate of return.

Reference no: EM131555052

Questions Cloud

Thinking of her home as leveraged investment : Thinking of her home as a leveraged investment, what rate of return (based on her original investment-only the down payment) did Cindy receive from this home?
How does the concept of pit bull mentality tie : "If you can't compete in a marketplace, create a new marketplace." Why is this important for the entrepreneur's focus in staying positive?
Empirical rule or the standard deviation rule : A large study of the heights of 1010 adult men found that the mean height was 70 inches tall. The standard deviation was 6 inches.
Discuss dynamics of university-building in formative decades : Discuss the dynamics of university-building in the formative decades between 1880 and 1910. Are there similar associations in higher education today?
What face value of life insurance : what face value of life insurance is needed for both Anne and Mark (just calculate for one-they both have the same need)?
Proportion of freshman in the sample : What is the probability that the proportion of freshman in the sample is between 0.491 and 0.580? Write only as a number, round to 4 decimal places.
Who is the antagonist in babylon revisited : Who is the antagonist in "Babylon Revisited"? Why is this person Charlie's antagonist? Is this person justified in his/her opinion of Charlie
Prepare a bank reconciliation report for daisey company : Prepare a 700 to 1,050-word bank reconciliation report including what principles of internal control were violated in this case?
What can you say about the reduced echelon form of a : Suppose A is a 4 X 3 matrix and b is a vector in R4 with the property that Ax = b has a unique solution. What can you say about the reduced echelon form of A?

Reviews

Write a Review

Financial Management Questions & Answers

  What must be the uniform annual sales to make plan

What must be the uniform annual sales to make Plan 1 and Plan 2 equally attractive?

  With sales revenue as the independent variable

Homestead Telephone was formed in the 1940s to bring telephone services to remote areas of the U.S. Midwest. The early equipment was quite primitive by today’s standards. All calls were handled manually by operators, and all customers were on party l..

  Standard deviation of the portfolio return

Mr. Jones has a 2-stock portfolio with a total value of $560,000. $225,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 16.80%, Stock B is 10.75%, and correlation between Stock A and Stock B is ..

  Required return on equity increases as dividend payout ratio

Myron Gordon and John Lintner believe that the required return on equity increases as the dividend payout ratio is decreased. Their argument is based on the assumption that investors require that the dividend yield and capital gains yield equal a con..

  Considering perpetual project

Dexter & Daughter are considering a perpetual project which will produce annual cash inflows from sales of $126,000 and annual cash costs of $87,500. The initial cost of the project is $134,000. The firm has a 34 percent tax rate and an unlevered cos..

  Standard cost is a predetermined amount

standard cost is a predetermined amount that-Should be incurred under relatively efficient operating conditions-Will be incurred for an operation or a specific objective-Must occur for an operation or a specific objective

  What is the value of uppers shares today

The next dividend for the Upper Growth Company will be $0.50 per share. Investors require a 14% return on companies such as Upper. Upper’s dividend increases by 5% every year. Based on the dividend growth model, what is the value of Upper’s shares to..

  What is your estimate of the stock current price

A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated that the company's dividend will grow at a rate of 22% per year for the next 2 years, then at a constant rate of 7% thereafter. What is your estimate of the stock's cu..

  Average balance in accounts payable and accounts receivable

Calvani, Inc., has a cash cycle of 39.5 days, an operating cycle of 55 days, and an inventory period of 23 days. The company reported cost of goods sold in the amount of $355,000, and credit sales were $578,000. What is the company’s average balance ..

  Compute the irrs for this project

Compute the IRRs for this project. what is the NPV of the project?

  Under the direct write-off method

Under the direct write-off method, the entry to write off an uncollectible account of $3,400 includes a:

  Find the present value of each of the future cash flows

Use the PV command to find the present value of each of the following future cash flows at a discount rate of 10% per year, compounded monthly:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd