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Sholpan
1 month ago
5

Marc is 32 and married to Estella, who is 30. Estella is a stay-at-home mom to their two children, ages 1 and 4. They currently

live on Marc's salary of $110,000 (after taxes) that just about meets their household expenses. They would like to make sure that if Marc dies, they replace his income for 17 years, which would match their mortgage maturity and their kids would be well off to college; fund the children's college education ($300,000); establish a retirement fund for Estella ($250,000) to supplement Marc's Social Security retirement benefits; cover funeral costs ($10,000); and establish a 3-month emergency fund. If Estella dies, they want to have enough insurance to be able to pay for child care ($36,000 per year) and housekeeping services ($12,000 per year) for 17 years, to establish an emergency fund, and for funeral costs. They have the following financials:
Marc's employer provides a year's salary life insurance. Family is eligible for Social Security survivor benefits of $55,000 if Marc dies. Household expenses would be 20% lower if either parent dies. Current savings and investments of $23,000.
Using the financial needs approach, how much life insurance would you recommend?
A. $905,500 on Marc; $778,500 on Estella
B. $1,015,500 on Marc; $756,500 on Estella
C. $487,500 on Marc; $340,500 on Estella
D. $1,063,500 on Marc; $708,500 on Estella
Business
1 answer:
Katen [3.5K]1 month ago
6 0

Answer:

B. $1,015,500 for Marc; $756,500 for Estella

Explanation:

Currently, Marc earns $110,000 which is used for managing the family's living costs. In the event of Marc's passing, there would need to be an increase in the insurance policy as he is the sole breadwinner in the family. Estella, being a homemaker, requires less insurance coverage compared to Marc since she would be supported by Marc's income continuity.

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Briefly describe Singapore’s new strategy for getting the economy back on track? Do you approve of this new strategy for getting
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2 months ago
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Answer:

The right choice is option (D).

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The scenario provides the following information:

Operating Income (EBIT) = $2,500,000

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Thus, we can determine BBC's free cash flow using this formula:

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