Please help understand the following: "Life insurance can be used as hedge against future risk of financial loss to others (beneficiaries) due to your (policy holder's) death. But, do you need life insurance, and if you do, how much?"
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Whether one needs or does not need life insurance is a question that depends on the individual, how much he makes from his job and the financial situation of his family. For those who do not have families, life insurance demand is very low. Thus, if they die, nobody else depends on them so the non-existence of their income will not be felt very far (other than by maybe certain charities). Thus, these types of people usually may not buy life insurance or may not buy very big life insurance policies (some may buy on the ...
The solution discusses "Life insurance can be used as hedge against future risk of financial loss to others (beneficiaries) due to your (policy holder's) death. But, do you need life insurance, and if you do, how much?"
Guillermo Furniture: Project future cash flows over the life of an investment alternative; what discount rate?
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What information is needed to determine the present value of an investment? Using the information in the Guillermo Furniture Scenario and spreadsheet, how would you project the future cash flows each year over the life of one of the investment alternatives being considered? (Please provide a specific example.)
How does a company determine what discount (interest) rate to use when computing present value? Think about today's economy. How would you use the current information to determine the value of an investment today? Would it be higher or lower than it was a year ago? Why?View Full Posting Details