Answer:
The expected profit from the addition is $47,000
Explanation:
Total Addition can be calculated by netting expected values of all situations as follow:
Expected value = %Chance x additional Profit/loss
i Expected profit = 50% x $100,000 = $50,000
ii Expected profit = 30% x $0 = $0 (Profit is same there is no addition)
iii Expected profit = 20% x ($15,000) = ($3,000)
The expected profit from the addition = $50,000 + ($3,000) = $47,000
Answer:
Part a.
If the Congress of country U to clothing insurance gives a preferential tax treatment, and the insurance company agrees to pay 80% of the clothing expenses and the tax subsidizes the insurance premium, it will result in increase in the consumption of clothes, because people will buy clothes as if they were free.
With this change in behavior there will be decline in economic efficiency because purchasing of formal and expensive clothing is not done on a regular basis, with clothing insurance people will buy less costly daily wear clothes at subsidized rates or for free and the price of clothes will decrease.
Part b.
People who can pay for the 20% remaining cost of clothes will buy insurance clothing and those who can pay the premium. Moreover, the rich will over consume than the poor because they are the ones who will give more importance to good clothing.
Part c.
If a person spends $2000 on clothing the clothing, insurance cost will be more than $2000 because higher the probability of claim higher will be the premium charged by the insurance company.
Part d.
This is not a good idea by the Congress of country U because good clothing is something every person would like to have. Like in health insurance, people should be insured for big life threatening health issues and for minor health issues people should pay out of their pockets, because people take health insurance benefits for minor health issues since health is more or less free in the COUNTRY U. The high premium costs and high prices are completely ignored.
Answer:
The days' sales uncollected ratio is used to: Estimate how much time is likely to pass before the amount of accounts receivable is received in cash
Explanation:
The days' sales uncollected ratio is an Asset Management ratio which calculates the length of time that it to collect credit from a customer and the first option is correct.
