Answer:
The answer is: In order for the company to break even on all the $88,000 policies in that area it must charge $528 per yearly policy.
Explanation:
In order to calculate what premium the insurance company should charge in order to break even, we must know how much money the company will have to pay during the year.
Fire insurance policy of $88,000
<u>Possible losses Probability Money paid by company </u>
total loss 0.001 $88,000
50% loss 0.01 $44,000
The company will have to pay $88 ($88,000 x 0.001) for a total loss and $440 ($44,000 x 0.01) for a 50% loss, we add them up and get $528.
In order for the company to break even on all the $88,000 policies in that area it must charge $528 per yearly policy.
Answer:
- Derek is an agent of Jonah
- Derek failed in his fiduciary duties to his principal
Explanation:
An a agent is someone that is appointed by a principal to take care of their interests. The agent's loyalty is to only his principal and he should not manipulate the relationship for personal gain.
In the given scenario Jonah appointed Derek to arrange for parasailing activity. So he is an agent to Jonah in this respect.
However Derek chooses an outfit called Wind Beneath My Wings where he is an owner, he put aside $600 instead of $350 for the reservation, and the company is unlicensed.
All these are violations of Derek's fiduciary duty. He put Jonah at risk for his own personal gain.
Answer:
Explanation:
Firms still choose to go for an IPO for the following reasons;
1. Majorly, it is a means of generating revenue. Revenue is generated when stocks are sold to the public.
2. It is also a means of reducing risk, The cost of running the business is spread across many investors, so is the risk.
3. There is reduction of the overall cost of capital and gives the company a more solid standing when negotiating interest rates with banks.
4. Companies can easily offer up stocks instead of cash in the acquisition of other companies or in the case of mergers.
5. Having stocks listed on NSE is a means of public exposure
Investors choose to buy stocks of IPO firms because the initial offering is usually at a low rate since the firm is still small and relatively unknown. This stocks bought at a cheap rates have the chance of rising thus generating gains for the investors.
Answer: c. the market price charged to outside customers
Explanation:
When a division is able to sell its products to customers outside the company for a certain price but instead has to transfer these to another division in the company, the minimum transfer price will have to be the selling price to the customers outside so that the division would not make losses.
The division that this good is transferred to will then reflect the cost of acquiring the goods as that selling price. This cost will be accounted for when the new division wants to sell their own goods that way this cost will be recuperated on a company level.
