Question
Bill and Ted are both covered by long-term disability policies that are fundamentally identical except for their premiums. Bill has no health risks, works in
Bill and Ted are both covered by long-term disability policies that are fundamentally identical except for their premiums. Bill has no health risks, works in a low-risk job, and has a policy that covers $50,000 a year in benefits. In contrast, Ted's health risks and works in a risky job. Ted's policy covers $100,000 a year in benefits. According to the guidelines in the text, which line in the table below best approximates Bill's and Ted's expected annual long-term disability premiums?
Bill Line A $500 Ted $4,000 Line B $6,000 $48,000 Line C $500 $1,000 Line D $2,000 $4,000
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Cost Management Accounting And Control
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