What type of insurance policy would you recommend

Assignment Help Financial Management
Reference no: EM131190116

John Jones is married, with a son, and would like to purchase enough life insurance to provide the following for his family.

Pay off home mortgage                   $200,000

Pay off car loan                                 20,000

Final burial expenses                         10,000

College education for his son              60,000

Annual living expenses for his family   60,000/year for 20 years

If he were to die, his son and wife would receive $14,400 annually for 12 years from Social Security. His wife is also the primary beneficiary of his $100,000 group life policy. Given this information, how much more life insurance does John need? Additionally, John would like to keep his cash outlay as low as possible and the insurance policy that he purchases to last only 20 years.

What type of insurance policy would you recommend?

Show all calculations for full credit.

Reference no: EM131190116

Questions Cloud

Compute the required pressure in the oil : A hydraulic cylinder must be able to exert a force of 38.8 kN. The piston diameter is 40 mm. Compute the required pressure in the oil.
Financial planning environment : 1. What are the stages of an economic cycle? Explain their significance for you personal finance. 2. Describe employee benefit and tax planning. How do they fit into the financial planning environment?
Explain why organizational structures differ : In a PowerPoint presentation (approximately 9 slides), explain why organizational structures differ. Define and provide an example of the four reasons why structures differ, which are as follows: strategy, organizational size,
Determine the force components of the water on the nozzle : Determine the force components of the water on the nozzle and the magnitude of the resultant force. The pressure in the hose is 400 kPa and the water exits to the atmosphere.
What type of insurance policy would you recommend : John Jones is married, with a son, and would like to purchase enough life insurance to provide the following for his family. If he were to die, his son and wife would receive $14,400 annually for 12 years from Social Security. His wife is also the pr..
Have you ever engaged in social loafing while on a team : Based on your self-assessment, what do you see as your strengths and weaknesses regarding working on a team? Have you ever engaged in social loafing while on a team? Why or why not? How does working effectively on a team give you an advantage in the ..
Explain risk methodologies used in capital budgeting : What financial figure do you believe was the determinant to your decision and why? How would you be able to apply this particular financial information to other situations? Discuss risk methodologies used in capital budgeting.
Identify key ways that apples progress report has changed : Identify the key ways that Apple's Progress Report has changed since last year.- Examine the manner in which Apple's Supplier Code of Conduct helps the organization operate as a socially responsible organization.
Journalize the adjusting entries : The trial balance of Bellemy Fashion Center contained the following accounts at November 30, the end of the company's fiscal year., Journalize the adjusting entries

Reviews

Write a Review

 

Financial Management Questions & Answers

  Depreciation of the purchase price

1. The Los Angeles Lakers are sold for 650 Million. At a tax rate of 25% what is the new owner's yearly tax savings if he uses straight line depreciation of the purchase price over the full 15 years allowed by the IRS?

  What is the payback period for each project

Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow A Cash Flow B 0 –$ 51,000 –$ 96,000 1 20,000 22,000 2 26,600 27,000 3 22..

  Annual coupon bonds-what is the current price of the bonds

Grossnickle Corporation issued 20-year, noncallable, 8.1% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 19 years..

  Stock is expected to pay a year-end dividend

A stock is expected to pay a year-end dividend of $2.00, i.e., D1 = $2.00. The dividend is expected to decline at a rate of 5% a year forever (g = -5%). If the company is in equilibrium and its expected and required rate of return is 15%, The company..

  Long-term loan repayment of principal and interest

Farmers Delight Corporation reported sales of $350,000 in June, $380,000 in July, and $390,000 in August. The forecasts for September, October, and November are $385,000, $418,000, and $429,000 respectively. Wages and salaries are 12% of the previous..

  Find CSNs stock price using the FCFE method

CSN reported net income of $100 million last year. CSN expects net income to grow at 7% next year, at 5% in the following year, and then at a constant rate of 3.5% per year forever. CSN expects that its current ROE will remain constant forever. Find ..

  What is the value of the firms operations

Young's free cash flow during the just-ended year (t=0) was $100 million, and FCF is expected to grow at a constant rate of 5% in the future. If the weighted average cost of capital is 15%, what is the value of the firm's operations?

  Oil powered generator with a solar power generator

Georgia Power is contemplating replacing an oil powered generator with a solar power generator. The old generator was purchased 22 years ago and is being depreciated over its 25 years life to a zero salvage value using straight-line depreciation. The..

  Is there a better way to more precisely incorporate the risk

Rockford Ltd plans to expand its successful business by establishing a subsidiary in France. Is there a better way to more precisely incorporate the country risk of concern here?

  Find the size of the monthly payments

Joe secured a loan of $11,000 two years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 3%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by amor..

  Higher systematic risks must pay higher returns on average

The current market price of a security is $40, the security's expected return is 13%, the riskless rate of interest is 7%, and the market risk premium is 8%. a. What will be the security's price, if the covariance of its rate of return with the marke..

  Community of prospective purchase of largest local bank

You are a mayor of a small community of 12000 people. You are active in virtually all the civic activities of the town and as such your opinion is solicited on political, economic, sociological and other factors. You have been asked by one of the civ..

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