Paul, age 62, is applying for a universal life insurance policy and wants to arrange the beneficiary designation in such a way as to use the proceeds to provide lifetime income to his spouse, Marsha. Which of the following settlement options is best suited for this purpose?
A) The insurer can distribute the proceeds in a lump-sum payment, deposit the money in a bank account, and then set up a periodic distribution plan for Marsha.
B) Paul, as the owner, can pick life income as the settlement option his spouse must take when he dies. This option will give Marsha a monthly income she cannot outlive.
C) Paul can select the fixed-period option and base the distribution period on Marsha's life expectancy at the time of Paul's death.
D) Paul can leave the proceeds with the insurance company to accumulate interest and distribute the interest to Marsha."
Ans: B) Paul, as the owner, can pick life income as the settlement option his spouse must take when he dies. This option will give Marsha a monthly income she cannot outlive.
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John Walker loved his well paying job as an accountant with a mid-size local firm. His wife, Joan, a marketing executive at Vandelay, a major international latex products manufacturer, received a promotion to a higher level position within the company that required a move to Russia, but that would pay just slightly less than the couple's current combined income. John realized that it made him happier to move with his wife to Russia than to deny her what he realized was a once-in-a-lifetime career opportunity for her. John's reason for leaving his job to join his wife in Russia:
A. Is a rejection of Objectivism because it would leave the couple with less total income. B. Is an application of Objectivism because it focuses on preserving the relationship closest to him at the expense of his own happiness. C. Is a rejection of Objectivism because the consequence of the decision is to leave him, as an individual, less professionally well off. D. Is an application of Objectivism because he is basing his decision on advancing his own rational self-interest by supporting his wife's career move.
On January 1 of the current year, the Barton Corporation issued 10% bonds with a face value of $200,000 . Thebonds are sold for $191,000 . The bonds pay interest semiannually on June 30 and December 31 and the maturitydate is December 31, five years from now. Barton records straight-line amortization of the bond discount. Thebond interest expense for the year ended December 31 is
a. $10,900 b. $18,200 c. $21,800 d. $29,000