1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
posledela
3 years ago
6

Suppose there is an ordinary deductible of $40 and the maximum payment by the insurer is $130. Determine the standard deviation

of annual losses incurred by the automobile owner before the insurance reimbursement.
Business
1 answer:
Sedaia [141]3 years ago
5 0

An automobile owner has 40% chance of having exactly one accident in a year and 60% chance of having no accidents in a year. There is no chance that the automobile owner incurs more than one accident in a year.

If there is an accident, the loss amount has the following distribution:

Loss amount & Prob

30 0.3

60 0.15

100 0.45

180 0.1

Suppose there is an ordinary deductible of $40 and the maximum payment by the insurer is $130.

Determine the standard deviation of the payment made by the insurer to the automobile owner.

Answer:

The answer is 32.437

Explanation:

Let X be the loss and let Y be the payment by the insurer.

Hence, we have Y = o if x<= 40,

x-40 if 40 < x < 130

130 if x > = 170

Therefore, Var (y) = E (y^2) - [E(y)]^2

E(y) = 0.4[130 (0.1)+60 (0.45) +20 (0.15)] = 17.2

E(^2) = 0.4 [130^2(0.1) + 60^2(0.45) +20^2(0.15)] = 1348

Finally, Var(y) = 1348 -17.2^2 = 1052.16

Sqrt(1052.16) = 32.437

Therefore, the standard deviation of the payment made by the insurer to the automobile owner is 32.437

You might be interested in
You have been asked to analyze the Value Net of the craft brewing and distilling industries in your state, and you have observed
RUDIKE [14]

Answer:

The answer is: Complementary goods and services

Explanation:

Complementary goods and services are used with another good or service. For example, sugar is complementary to coffee, fuel is complementary to cars, etc.

Usually when the price or the quantity demanded of a complementary good or service changes, the other complementary good will be affected.

In this question, we are told that restaurants and lodging facilities are complementary to beer. So if the price of beer decreases (increasing the quantity demanded), the demand for restaurants and lodges will increase.

5 0
3 years ago
In a competitive market with identical firms, A. firms cannot earn positive economic profit in either the short run or long run.
Ksenya-84 [330]

Answer:

The answer is C.

Explanation:

In a competitive market, all firms produce identical goods and services. No firm or seller can influence the prevailing market price. To increase their revenue, firms must increase their outputs.

In this industry, firms make economic profit(revenue minus accounting cost minus implicit cost) in the short run but this economic profit reduces to zero in the long run because more firms that are attracted by the short run profit can enter the industry freely. Firms can also exit with little or no cost.

4 0
2 years ago
A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful oper
mafiozo [28]

Answer:

a. Straight-line method

Depreciation Expense for the first year: $333.75

b. Double-declining-balance method

Depreciation Expense for the first year: $667.5

c. Units-of-output method

Depreciation Expense for the first year: $450

Explanation:

a. Straight-line method

Depreciation Expense each year is calculated by following formula

Annual Depreciation Expense = (Cost of machine − Residual Value)/Useful Life = ($1,410 - $75)/4 = $333.75

Depreciation Expense for the first year: $333.75

b. Double-declining-balance method

Under the straight-line method, useful life is 4 years, so the asset's annual depreciation will be 25% of the Depreciable cost.

Depreciable cost = Total cost of machine - Residual value =  $1,410-$75 = $1.335

Under the double-declining-balance method the 25% straight line rate is doubled to 50% - multiplied times

Depreciation Expense for the first year = $1.335 x 50% = $667.5

c. Units-of-output method

Depreciation Expense per copy = (Cost of machine − Residual Value)/Life in Number of Units  = ($1,410 - $75)/13,350 = $0.1

Depreciation Expense for the first year = Depreciation Expense per copy x number of copies were made the first year = $0.1 x 4,500 = $450

3 0
3 years ago
Multiple-Product Break-even, Break-Even Sales Revenue Cherry Blossom Products Inc. produces and sells yoga-training products: ho
zmey [24]

Answer:

Answer 1.

DVD Equipment Set Yoga Mat

Sale in Units 13500 4500 9000

Sale Mix 3 1 2

Sales Mix Ratio = 3:1:2

Answer 2.

Let the Break Even Sales = X Units

Therefore, Linear equation of BEP:

3/6 X (8-4) + 1/6 X (25-15) + 2/6 X (16-9) = 119520 (Fixed Costs)

X = 19920 Units

BEP of

DVD = 19,920 Units X 3/6 = 9960 Units

Equipment Set = 19,920 Units X 1/6 = 3320 Units

Yoga Mat = 19920 Units X 2/6 = 6640 Units

Answer 3.

DVD Equipment Set Yoga Mat Total

Sale in Units 13,500 4,500 9,000 27,000

SP 8 25 16

Sales in $ 108,000 112,500 144,000 364,500

Less: Variable Costs 54,000 67,500 81,000 202,500

Contribution 54,000 45,000 63,000 162,000

Contribution Margin Ratio 50.00% 40.00% 43.75% 44.44%

Contribution Margin Ratio = Contribution / Sales

Overall Break Even Sales Revenue = $119520 (Fixed Costs) / 44.44% (Contribution Margin Ratio)

Overall Break Even Sales Revenue = $268,920

Answer 4.

Margin of Safety = Sales - BES

Margin of Safety = $364,500 - 268920 = $95,580

Explanation:

4 0
3 years ago
Essman might overlook strategic risks, the business plan at hand can be a good plan and the Product mix may be one of the best.
WITCHER [35]

Risk retention is good for the company as the good has the better strategies planned about the product mix and if the things changed in the future the company is able to conquer the loss.

<h3>What is product mix?</h3>

Product mix is the total number of products sell by  the particular company, the products can be further divided into the categories and division. Many big companies have the different line products like the cosmetics, glasses, home materials and others.

Thus, Risk retention is good for the company as the good has the better strategies

For more details about Product mix, click here:

brainly.com/question/17463487

#SPJ1

6 0
1 year ago
Other questions:
  • DogMart Company records depreciation for equipment. Depreciation for the period ending December 31 is $1,400 for office equipmen
    13·1 answer
  • Consumers generally shop and compare on their computers, then purchase with their smartphones.​truefalse
    9·1 answer
  • Is the management function that involves allocating resources, assigning tasks, and establishing procedures for accomplishing th
    11·1 answer
  • Sienna Company has the following information for January. Cost of direct materials used in production $20,000 Direct labor 15,00
    13·1 answer
  • Suppose the Fed purchases $100 million of U.S. securities from security dealers. If the reserve requirement is 20 percent, the c
    9·1 answer
  • What determines our ability to purchase things we want and/or need?
    11·1 answer
  • Why is representative money more useful than commodity money?
    14·2 answers
  • Cho vay thương mại và cho vay tài chính khác nhau ở chổ nào?
    7·1 answer
  • In bobek's study of the effect of gender on decision-making of public accounting professionals, it was found that:____.
    6·1 answer
  • What amount must be invested today at an interest rate of 5. 5% compounded monthly, if you want to purchase a $550,000 machine 5
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!