The discount rate that should be used in the net present value calculation to compensate for risk is ________. (See Table 11.7)

Merchant Corporation provides plumbing services. Transactions of Merchant during the first year of operations are given below

a) Received $12,000 cash and issued common stock to Sharon b) Paid $1,600 cash for equipment to be used for plumbing repairs. c) Borrowed $14,000 from a local bank and deposited the money in the checking account. d) Paid $600 rent for the year. e) Purchased $200 of office supplies by cash. f) Completed a plumbing repair project for a local lawyer and received $3,000 cash. Calculate the amount of total liabilities at the end of the first year. A) $14,000 B) $12,000 C) $24,400 D) $3,000

Which of the following statements does NOT apply to the insuring clause?

A) It usually specifies that the benefits are subject to all provisions and terms stated in the policy. B) It represents the insurer's promise to pay benefits for specific kinds of losses. C) It defines losses not covered by the policy. D) It identifies the insured and the insurer.