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13 August, 01:55

Alpha partnership has 8 partners who have entered into a binding buy/sell agreement that requires any surviving partners to purchase the partnership interest of any partner to die. The partnership uses an entity approach to fund this arrangement. How many policies are required to satisfy this arrangement? (a) 1. (b) 8. (c) 16. (d) 64.

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  1. 13 August, 02:02
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    total number of policies = 64

    so correct option is (d) 64

    Explanation:

    given data

    partnership = 8 partners

    to find out

    How many policies are required

    solution

    we know that every partner required a policy for each and every other partner

    so here we can say number of policies will be

    number of policies = 8 * 7

    number of policies = 56 Policies

    and

    here firm also hold a policy for each partner i. e here 8

    so here total number of policies will be

    total number of policies = 56 + 8

    total number of policies = 64

    so correct option is (d) 64
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