Kevin has an individual disability income policy that his insurer agrees to keep in force until age 60
However, the company has the right to increase the premium each year for the underwriting class in which Kevin has been placed. Which renewal provision is found in Kevin's policy?
A) noncancellable
B) guaranteed renewable
C) conditionally renewable
D) nonrenewable.
Answer: B
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Which of the following types of audit evidence is the least reliable?
a. Evidence from the client's organization. b. Evidence derived from a well-controlled system. c. Evidence from independent outside sources. d. Original documents.
Phoenix Agency leases office space. On January 3, Phoenix incurs $38,400 to improve the leased office space. These improvements are expected to yield benefits for 5 years. Phoenix has 3 years remaining on its lease. Compute the amount of expense that should be recorded the first year related to the improvements.
A. $7680. B. $20,100. C. $12,800. D. $7300. E. $14,980.
Which of the following is not a true statement regarding SFAS No. 87?
a. It requires the recognition of a minimum pension liability when accumulated benefit obligations exceed the fair value of plan assets. b. It has achieved greater uniformity in measuring accrued pension expense. c. It mandates the use of the accumulated benefit method. d. It uses service cost rather than normal cost.
If a project's net present value (NPV) is positive,:
A. Its internal rate of return is less than the firm's expected rate of return. B. It must have multiple internal rates of return. C. Its terminal value is less than the future value of the initial investment in the project. D. Its initial investment is recovered on a present value basis prior to the end of the project's useful life. E. The present value of the project's cash inflows and the present value of its cash outflows are equal when they are discounted at the firm's required rate of return.