Annuity Purchase Blog

Question: I have an annuity but I need cash now?

admin — Fri, 23 Jul 2010 21:05:19 +0000

who do i call?

J G Wentworth

I HATE those damn commercials

The accounting definition of income is:?

admin — Thu, 15 Jul 2010 15:59:15 +0000

Question No: 1 – Please choose one
The accounting definition of income is:
Income = Current Assets Current Liabilities
Income = Fixed Assets Current Assets
Income = Revenues Current Liabilities
Income = Revenues Expenses
Question No: 2 – Please choose one
What would be the capital spending for an organization who has purchased fixed
assets of Rs. 200,000 and sold fixed assets of Rs. 45,000?
Rs. 245,000
Rs. 200,000
Rs. 155,000
Rs. 45,000
Question No: 3 – Please choose one
Selected information from SNT Company’s accounting records is as follows:
o Cash paid to retired common shares Rs. 15,000
o Proceeds from issuance of preferred shares Rs. 20,000
o Cash dividends paid Rs. 8,000
o Proceeds from sale of equipment Rs. 25,000
On its cash flow statement for the year, SNT Company should report net cash
flow from financing activities as:
Rs. 3,000 net cash inflow
Rs. 3,000 net cash outflow

Rs. 8,000 net cash inflow
Rs. 8,000 net cash inflow
Question No: 4 – Please choose one
SNT Company has a current ratio of 3:2. Current Liabilities reported by the
company are Rs. 30,000. What would be the Net Working Capital for the
company?
Rs. 45,000
Rs. 15,000
( Rs. 45,000)
( Rs. 15,000)
Question No: 5 – Please choose one
Which of the following would not improve the current ratio?
Borrow short-term to finance additional fixed assets
Issue long-term debt to buy inventory
Sell common stock to reduce current liabilities
Sell fixed assets to reduce accounts payable
Question No: 6 – Please choose one
Which of the following are incorporated into the calculation of the Du-Pont
Identity?
I. Return on assets
II. Equity Multiplier
III. Total Assets Turnover
IV. Profit Margin
I, II, and III only
I, III, and IV only

II, III and IV only
I, II, III, and IV
Question No: 7 – Please choose one
The concepts of present value and future value are:
Directly related to each other
Not related to each other
Proportionately related to each other
Inversely related to each other
Question No: 8 – Please choose one
Which of the following is a special case of annuity, where the stream of cash flows
continues forever?
Special Annuity
Ordinary Annuity
Annuity Due
Perpetuity
Question No: 9 – Please choose one
Which of the following is an unsecured bond for which no specific pledge of
property is made?
Mortgage
Debenture
Collateral
Note Payable

Question No: 10 – Please choose one
Which of the following type of return refers to the percentage change in the
amount of money you have?
Nominal return
Real return
Inflation return
None of the given option
Question No: 11 – Please choose one
When real rate is _____, all interest rates will tend to be _____.
Low; higher
High; lower
High; higher
None of the given options
Question No: 12 – Please choose one
Which of the following is the extra yield that investors demand on a taxable bond
as a compensation for the unfavorable tax treatment?
Interest rate risk premium
Inflation risk premium
Default risk premium
Taxability premium
Question No: 13 – Please choose one
In which type of the market, previously issued securities are traded among
investors ?

Primary Market
Secondary Market
Tertiary Market
None of the given options
Question No: 14 – Please choose one
Place the following items in the proper order of completion regarding the capital
budgeting process.
(I) Perform a post-audit for completed projects;
(II) Generate project proposals;
(III) Estimate appropriate cash flows;
(IV) Select value-maximizing projects;
(V) Evaluate projects.
II, V, III, IV, and I
III, II, V, IV, and I
II, III, V, IV, and I
II, III, IV, V, and I
Question No: 15 – Please choose one
An investment will be ___________ if the IRR doesn t exceeds the required return
and ___________ otherwise.
Accepted; rejected
Accepted; accepted
Rejected; rejected
Rejected; accepted
Question No: 16 – Please choose one

IRR and NPV rules always lead to identical decisions as long as :
Cash flows are conventional
Cash flows are independent
Cash flows are both conventional and independent
None of the given options
Question No: 17 – Please choose one
A project whose acceptance does not prevent or require the acceptance of one or
more alternative projects is referred to as :
A mutually exclusive project
An independent project
A dependent project
A contingent project
Question No: 18 – Please choose one
Finding Net Present Value comes under which type of capital budgeting criteria
?
Discounted Cash Flow Criteria
Accounting Criteria
Payback Criteria
None of the given options
Question No: 19 – Please choose one
___________ Cost is an outlay that has already occurred and hence is not affected
by the decision under consideration.

Sunk
Opportunity
Fixed
Variable
Question No: 20 – Please choose one
Which of the following is the overall return the firm must earn on its existing
assets to main

Income=revenue- expenses. Thats the answer you’re looking for

Would senior citizens buy Medicare, final expense, annuity or long term care insurance from an openly gay man?

admin — Tue, 06 Jul 2010 22:32:41 +0000

It was at the the end of a day-long sales training program with a group when one of the business owners piped up, "What we need are some gay guys to sell our merchandise." She was asked, "Why specifically gay men?"

She answered, "Because when we visited stores yesterday in the City, they were out and willing to tell anyone in a matter-of-fact way. They were personable, fun, you just wanted to buy from them." I understood from her descriptions of several of these guys why she would want them to work for her.

Expressive gays tend to be extroverts who occasionally tend to make their private business public and sharing information without boundaries. The Expressive is the Grasshopper living for today. Recognized by customers for their uniqueness. Again, their enthusiasm and energy are the spark plugs for your team.

Their enthusiasm can make them feel a bit invincible at times; and can overwhelm Analyticals who want “just the facts.”

Expressive personalities have to process externally while Driver and Analytical personalities don’t. The downside to an Expressives’ natural inclination to show multiple possibilities might require the customer to bring them back to the product the customer is considering, not all of the other possibilities. Their natural enthusiasm can also inflate products’ benefits without devoting time to adequately explaining why.

But I can see how it could easily be confused. An Expressive guy comes out, has to deal with the social ramifications and decide he’s OK with it. Because of coming through that process, there is no baggage so he is free to let himself be open to meeting others. I am okay with me being me. But will the boss and the world be okay with the new me?

That all stems from the basic Expressive personality. In other words, what this owner identified was the personality type that happened to be gay; not a gay person. With me?

The Expressives I think are the most challenging of all the personalities. Their very energy is what keeps many from hiring them. Their creativity, individualism and self-assuredness can be threatening. And when you’re trying to teach them a rigid process your Analtyical employees can easily take to, this personality will constantly challenge why they have to do it "that way." They will complain their creativity is being stifled – they feel like robots.

What we have to remember is the Expressive is the spark-plug to your crew. They are the one that adds color, excitement and fun.

Is that a gay thing? Or a sales thing?

Should you recruit gay men to sell your stuff? Do yo think business people wold buy6 products and services from a gay guy?

Do women tend to trust gay guys who are expressive? Yes?

You don’t need a lot of Expressives on your sales force but at least one keeps things interesting and fun for your crew and your customers.

My question is selling traditional dry and boring products like insurance, health,Long Term Care in the home. with my french nails, arched brows, sparkly personality do I you think it will work for me or that I am living in a fools paradise and will be received with a thundering thud.

I am not the same as I was a year ago ( In am open now, wasn’t then and there have been hormonal changes too) and I want to reenter the workplace as I am not as I was. What do you think, be nice but be honest. Work places tend to be conservative and traditional and some industries even more so. Help me please !!! LOL Really some thoughtful advice will be appreciated.
I am asking about myself, I am trying to decide what to do career wise. Thanks!

It’s a sales thing. If you can’t sell, it’s not going to help that you’re gay.

If you CAN sell, it’s going to matter a way lot, where you live. There are lots of liberal, gay seniors, in certain communities of the USA. There are lots of liberal straight seniors, that would get a kick out of a flamboyant, CREDIBLE insurance guy.

If you’re target clientelle is in Mayberry, though, I’d look for something else.

95% of insurance salespeople wash out – regardless of sexual preferences. It’s damn hard work. Plus, you’ve GOT to be credible.

Would you or senior citizens buy Medicare, life, annuity or long term care insurance from an openly gay man?

admin — Tue, 06 Jul 2010 22:32:26 +0000

Their enthusiasm can make them feel a bit invincible at times; and can overwhelm Analyticals who want “just the facts.”

That all stems from the basic Expressive personality. In other words, what this owner identified was the personality type that happened to be gay; not a gay person. With me?

What we have to remember is the Expressive is the spark-plug to your crew. They are the one that adds color, excitement and fun.

Is that a gay thing? Or a sales thing?

Should you recruit gay men to sell your stuff? Do yo think business people wold buy6 products and services from a gay guy?

Do women tend to trust gay guys who are expressive? Yes?

You don’t need a lot of Expressives on your sales force but at least one keeps things interesting and fun for your crew and your customers.

Really some thoughtful advice will be appreciated.

Without hesitation. All he (or a gay woman) would have to show me is knowledge of his (or her) product.

REVISED: Mom passed away leaving my daughter as beneficiary on an Annuity?

admin — Fri, 18 Jun 2010 23:45:31 +0000

Here is more specific information on my previous question: My daughter could not have the money until she turned 18. When she turned 18 she cashed out the annuity being a death benefit inheritence and took the money and put it away in a savings account for college. At the end of the 2009 year she was sent a 1099-INT form with gross disb. being $50, 219.00 (box 1) and taxable amount being $27,525.00 (2a). This was the only income she had and we paid over $5,000.00 in IRS taxes. Now after talking with others (not accountants) I’m being told that since this was an inheritance it was supposed to be tax free up to $100,000.00. We all are in Calif.

Only the portion that already existed when the death occurred is an inheritance. That is the only part that is tax-free. The taxable amount is the portion that was added during the years between the death and now, which is not an inheritance and is not tax-free.

If you won $100,000,000, and had the option of a lump sum or annuity payments, which would be better for tax.?

admin — Tue, 15 Jun 2010 22:53:32 +0000

purposes?

Since winnings are taxed as ordinary income, would it matter how you elected to receive it? Would it be better to go with the current tax rate for that much money, or take a gamble on the top rate being lowered some years down the road? Because the top marginal rate is going to be at least 39.6% starting in 2011 (not sure how many years it will be in effect). But the top rate now is 35% on income that is over $373,650, plus $108,421.25.

So I figured that amount would come to $34,869,222.50 + $108,421.25=$34,977,643.75.

And SS tax is 6.2% on the first $106,800 ($6,621.60) and Medicare tax is 1.45% (1,450,000).

That comes to about $36,434,265.35 not including state tax (if the its paid in that state).

That’s about 36% total. My numbers may be off, but just assuming you could walk away with a little over $60,000,000 right now, would it be better to take that or (let’s assume) $5,000,000 (pre-tax) for 20 years?

I would take the annuity certain over a lump sum. But not for tax reasons.

If you take a lump sum, they only pay you the present value of the annuity certain. At today’s interest rates, that’s around half of the gross amount. Since you are getting a discounted payout up front on the lump sum, inflation is largely a wash. In fact, if the 20-year rolling averages on inflation hold true, and there’s little reason to think that they won’t, you may even come out a bit ahead with the annuity certain.

From a tax perspective the savings will be minimal with the annuity certain. Taking the annuity does shift more of the income each year into lower brackets, but with a win that large you’ll be looking at the difference in net rates of between 34.2% and 34.5%. That does assume that rates stay static at their current levels of course, which is unlikely given the status of the deficits, but there’s no way to accurately predict future tax rates. Assuming that you took the lump sum and invested it wisely you’d still be hit with the increased taxes on the future income that it generated. Another wash on taxes.

None of that would influence my decision significantly though. What my decision is based upon is what happens to most people who have a win that large and who take the lump sum. Most of them wind up broke and bankrupt in a few years. With the annuity certain the odds of that are greatly reduced.

Many lump-sum winners give away a lot of their winnings to friends and family, blissfully unaware of the gift tax consequences of doing so. More than one has given away more than half of their winnings, only to be slammed by the IRS for every remaining penny. Gift taxes run as high as 55%. It does not take a mathematical genius to figure out that if you give away half, you won’t be able to pay the tax bill with the remaining funds. Some folks who took the annuity certain did run into financial trouble in the first year or two, but learned from their mistakes while they could still afford to get back on an even keel and did quite well in the out years.

The claim that you are depending upon the state to stay solvent in order to collect the annuity certain is pure FUD from someone with no financial savvy. The annuity is not paid directly by the state, but with proceeds from an actual annuity contract purchased from a highly-rated commercial insurance company. Many states now break the contracts up among several carriers as a hedge against one carrier going bust as AIG nearly did. For you to lose out would require that all of the insurance companies AND the state all became insolvent. If things ever get THAT bad, the guy who took the lump sum is probably going to be as broke as you are, even if he invested it wisely. And contrary to what that respondent claims, no state has gone bankrupt since the Civil War. A few cities have in the past 50 years, most notably New York and Miami, but no states have.

Note: Social Security taxes only apply to earned income. You would not pay any FICA taxes on a lottery win, regardless of how you took the payout.

The debt of a firm has (as a percentage of assets);the is the degree of fi?

admin — Tue, 01 Jun 2010 06:22:31 +0000

Midtem Examination
Spring2009
ACC501 Bussiness Finance

Question No:1 (Marks:1)-Please choose one
The debt of a firm has (as a percentage of assets);the is the degree of financial leverage.
More;Greater
LessP;Greater
More;Lower
None of the given options
Question No:2 (Marks:1)-Please choose one
Which one of the following is(are) the non cash-item(s)?
Depreciation
Deferred Tax
Both depreciation and deferred tax
Neither depreciation nor deferred tax
Question No:3 (Marks:1)-Please choose one
Which of the following is the extra rate you would pay if you earn one more dollar?
None of the given options
Average Tax Rate
Marginal Tax Rate
Flat Tax Rate
Question No:4 (Marks:1)-Please choose one
which one of the following is NOT an investing cash flow?
Proceeds from the sale of a retained asset
Purchase of a delivery vehicle
Sale of a machinery
Purchase of inventories
Question No:5 (Marks:1)-Please choose one
The balance Sheet reported a beginning balance of Rs 23,000 in Accounts Receivable and an ending balance of Rs 16,000.The income statement reported sales revenue of rs230,000.Using this information what will amount of cash collected from customers?
Rs269, 000
Rs253, 000
Rs237, 000
Rs230, 000
Question No:6 (Marks:1)-Please choose one
What would be the amount of current assets for a company if the compant would has a current ratio of 4:1 and net working capital; of Rs.30,000?
Rs 6,000
Rs 10,000
Rs 24,000
Rs40,000
Question No:7 (Marks:1)-Please choose one
Which of the following is(are) True regarding Du pont identity?
The decomposition of ROE is a convenient way of systematically way of approaching the financial statements analysis
Du pont identity tells where to start looking for the reasons if ROE is unsatisfactory by some measure.
The du pont identity tells you that ROE is affected by three things i.e operating efficiency,asset use efficiency and financial Leverage.
All of the given options
Question No:8 (Marks:1)-Please choose one The Present value of a sum of Rs. 100 to be received in the future value will be:
Less than Rs.100
None of the given options
More than Rs.100
Equal to Rs .100
Question No:9 (Marks:1)-Please choose one
You just won a prize,you can either receive Rs 950 today or Rs1000 in one year.Which option do you prefer and why if you can earn 8 percent on your money?
Rs 950 because it has the highest future value
Rs 950 because you receive it sooner
Rs 1000 because it ismore than Rs .950
Either because the both options are of equal value
Question No:10 (Marks:1)-Please choose one
Which one of the following is thw correct formula to calculate present value of annuity?

Question No:11 (Marks:1)-Please choose one
What will be the annual payment on a 6-year Rs.14000 that carries a 7 % interest rate?
Rs.2816
Rs.2973
Rs 3088
Rs3277
Question No:12 (Marks:1)-Please choose one
How much be deposited at 15% each of the next 7 years to have Rs 4565?
RS 452.75
Rs 570.50
Rs 350.20
Rs 412.50
Question No:13 (Marks:1)-Please choose one
Which of the following is a special case of annuity,where the streams of cash flows continues forever?
Special Annuity
Ordinary Annuity
Annuity Due
Perpetuity
Question No:14 (Marks:1)-Please choose one
Which of the following represent(s) a loan made by the investors to the issuer?
Bond
Common Stock
Preferred Stock
All of the given options
Question No:15 (Marks:1)-Please choose one

Are you SERIOUSLY posting your ENTIRE midterm exam on the internet so that others can do it for you? Good luck in life.
——————
The answer to #13 is Perpetuity. (Do you not have a textbook or ever study?)

good or bad reviews on a prudential annuity?

admin — Wed, 26 May 2010 18:19:35 +0000

Does anyone have an Annuity with Prudential? Is it worth it to get into ? The one I am asking about is the Pruco Life Ins Co AZ; PREMIER RETIREMENT VAR B??
74429E149 any information is appreciated… thanks
Carol

Do you really need an annuity?
I just don’t like their fees which are on average of about 5%.
All this just to get a check each month seems steep.

Could you take your money and buy ladderd cd’s?
If you are retired, you want your money to be safe and cd’s are FDIC insured.
Annuities arent – if Prudential goes under – so long money (up to 100,000 is insured).

Two companies I want you to consider first.
Charles Schwab – call them for an annuity package, and Fidelity Investments.
They have lower cost annuities because "they are not out to get ya".

I know I will never make annuities – I know from a retirement calculator that I can take out 2 to 4% of my money out each year safetly and increase it with inflation.
I plan to have all my money in cd’s that pay out monthly and use that income for retirement.
/

Can I buy a house with a variable annuity and retain the tax deferral?

admin — Tue, 18 May 2010 09:43:10 +0000

It depends whether it is in a "Qualified" retirement plan or account or not. There is no way you are going to get a tax "deferral" if you spend it on a home, regardless of what type of account it is in.

But if it is in an IRA or eligible to be transferred to an IRA, once it is in the IRA, up to $10,000 used to build, buy, or modify your "first" home is excluded from the 10% penalty. However, the total distribution would be added on top your other income and taxed at your normal tax rate (some of which may bump into a higher tax bracket).

IRS Publication 575 covers pensions and annuities, and 590 covers IRAs (see irs.gov). Note that since Roth IRA contributions have already been taxed, you could withdraw Roth IRA "contributions" at any time without tax or penalty, but that is not an option if it is not currently in a Roth IRA. IRA to Roth IRA conversions are taxed the year they are converted and have to season in the Roth for 5 years to avoid the 10% penalty.

I need help with money I inherited, how do I claim?

admin — Tue, 11 May 2010 19:44:48 +0000

This will be a little lengthy, and I apologize for that in advance. I inherited some money from my Grandfather, he left it in an annuity. I have never had to deal with anything like this before. I am 18 years old, and I receive 352 dollars each month from the Government in the form of Social Security checks until the end of this summer, because my mother passed away when I was young. I have never had an on paper job, I had a really good summer job for family friends, and they didn’t pay in the form of checks. I have never paid taxes before, so I am not really familiar with that, but I could learn. I have to fill these papers out and my father is not going to help me because he didn’t inherit anything and is mad. I can take my benefit in a lump sum, I can apply for a Periodic Payment Annuity Benefit, I can elect the Beneficiary Continuation Option, I can become owner of the annuitant, I may enroll the money into a traditional or Roth IRA. I need to know which option I should choose, and they ask for Income Tax Withholding information. I can have them not withhold the taxable portion and agree that I understand I am responsible to repay them. I can have them remove 10% automatically before payment is sent, or can designate an additional portion to taxes. Help please, and thanks.

Ask the person handling the estate to suggest someone to discuss this with. This really isn’t something that you should get advice from strangers. Take the time to think about it. Don’t be in any rush to decide, it isn’t going anywhere.

p.s. Tell no one that you are getting money. Keep it top secret. It is none of their business & will prevent people from bothering you about it or worse.