All categories

3 years ago

Which financial strategy would you choose to mitigate risk exposure? In your own words, present an example using XYZ company

Business

1 answer:

Lubov Fominskaja [6]3 years ago

6 0

Answer:

Creating an Insurance fund

Explanation:

An Insurance fund could a very good financial strategy to mitigate risk exposure.

For example, XYZ company is an bank that has over 500, 000 customer base throughout the country. XYZ company has forseen possible financial loses resulting from theft and economic downturn in the future. A safe practice would be to allocate a portion of it's profit– either quarterly or annual profit to an Insurance fund which would mitigate the company from possible financial risks resulting from theft or economic vices.

This financial strategy has proven to be successful in real life in mitigating a company from exposure to risk.

You might be interested in

The income statement reports changes in fair value for which type of investment securities?a. Securities reported under the equi

sveticcg [70]

Answer: trading securities

Explanation:

An income statement is a company's financial statement and simply shows the revenues and the expenses of a company for a particular period. It shows how the company is doing whether it's running a loss or making profit.

The income statement reports changes in fair value for trading securities.

3 0

3 years ago

What is the first step you should take when you want to open a savings account?

harkovskaia [24]

B. Review the different savings account options that your bank offers

5 0

3 years ago

Read 2 more answers

MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-

Romashka-Z-Leto [24]

Answer:

The EMV for option a is $5,679,100

The EMV for option b is $5,719,200

Therefore, option b has the highest expected monetary value.

Explanation:

The EMV of the project is the Expected Money Value of the Project.

This value is given by the sum of each expected earning/cost multiplied by each probability.

a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing.

There are these following probabilities:

77% probability of selling 100,000 units at $610 each.

23% probability of selling 70,000 units at $610 each.

$EMV = 0.77*E_{1} + 0.23*E_{2}$

$E_{1} = 100,000*610 = 6,100,000$

$E_{2} = 70,000*610 = 4,270,000$

$EMV = 0.77*E_{1} + 0.23*E_{2} = 0.77*(6,100,000) + 0.23*(4,270,000) = 5,679,100$

(b) having the value analysis team complete a study.

There are these following probabilities:

74% probability of selling 85,000 units at $720.

26% probability of selling 70,000 units at $720.

The cost of value engineering, at 120,000. So this value is going to be dereased from the EMV.

$EMV = 0.74*E_{1} + 0.26*E_{2} - 120,000$

$E_{1} = 85,000*720 = 6,120,000$

$E_{2} = 70,000*720 = 5,040,000$

$EMV = 0.74*E_{1} + 0.26*E_{2} - 120,000 = 0.74*6,120,000 + 0.26*5,040,000 - 120,000 = 5,719,200$

4 0

3 years ago

Marginal cost ______(A) Is the change in total output from hiring one more factor of production.(B) Is the change in total cost

cupoosta [38]

Answer:

(B) Is the change in total cost from producing one additional unit of output

Explanation:

Marginal cost is the change in the total cost of production as a result of increasing the quantity produced by one unit.

Diminishing returns causes marginal cost to increase.

Marginal product of labor (MPL) is the change in output as a result of hiring one more unit of labour.

7 0

3 years ago

Katherine, Alliah, and Paulina form a partnership. Katherine contributes $150,000. Alliah contributes $150,000, and Paulina cont

ryzh [129]

Answer:

$33,750

Explanation:

The computation of the amount of income which is credited to Katherine's capital account is shown below:

= (Katherine contribution ÷ total contribution) × partnership income

= ($150,000 ÷ $400,000) × $90,000

= $33,750

The total contribution equals to

= Katherine contribution + Alliah contribution + Paulina contribution

= $150,000 + $150,000 + $100,000

= $400,000

8 0

4 years ago