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IceJOKER [234]
3 years ago
8

If a life insurance company sells a $240,000 life insurance policy with a one year term to a 25-year old lady for $210, the prob

ability that she survives the year is .999592. Find the expected value of this policy for the insurance company?
Business
1 answer:
MrMuchimi3 years ago
7 0

Answer: $112.08

Explanation:

Given that,

Life insurance policy = $240,000

Cost = $210

Amount to be paid by company to old lady if she survives (A):

= $240,000 - $210

= $239,790

Probability that she survives (P1) = 0.999592

Probability that she doesn't survives (P2) = 1 - 0.999592

                                                                     =  0.000408

Expected value of this policy for the insurance company:

= (P1 × cost of policy) - (P2 × A)

= 0.999592 × $210 -  0.000408 × $239,790

= $209.91432 - $97.83432

= $112.08

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7 0
3 years ago
On the statement of cash flows, the investing activities section would include a.cash paid for retirement of bonds payable b.cas
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C I think is the right answer
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BE6.10 (LO 4) Henry Quincy wants to withdraw $30,000 each year for 10 years from a fund that earns 8% interest. How much must he
marin [14]

Answer:

$201,302

Explanation:

Calculation for How much must he invest today if the first withdrawal is at year-end

First step is to calculate (FVF-OAn,i) using financial calculation

R = 30,000

n = 10

i = 8%

(FVF-OAn,i)=(6.71008)

Now let calculate the amount to be Invested today using this formula

Investment today = R (FVF-OAn,i)

Let plug in the formula

Investment today= 30,000 (6.71008)

Investment today = $201,302

Therefore the amount he must invest today if the first withdrawal is at year-end is $201,302

3 0
3 years ago
a new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special
egoroff_w [7]

Based on the information given the cost basis is $132,000.

Using this formula

Cost basis=Purchases price+ Transportation costs + Installation costs +  Special acquisition fees

Where:

Purchases price=$109,000

Transportation costs=$12,000

Installation costs=$5,000

Special acquisition fees=$6,000

Let plug in the formula

Cost basis=$109,000+$12,000+$5,000+$6,000

Cost basis=$132,000

Inconclusion the cost basis is $132,000.

Learn more about cost basis here:brainly.com/question/15637366

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Materiality of the assets

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