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3 years ago

What role does math play in the insurance industry?

Business

1 answer:

Nataly_w [17]3 years ago

3 0

Answer:

The correct answer based on the options given is A)

Explanation:

Actuarial Science is a branch of mathematics predominantly used by the Insurance Industry to create a formula or mathematical model that enables them to charge a profit-oriented rate for a particular risk.

If insurance companies charge arbitrarily, they may overcharge thus leading to a collapse of the system. If they undercharge, the system of pooling risks becomes unsustainable as claim paying capabilities are reduced.

Hence the need to use a mathematical model to ensure that rates give room for the ability of the system to meets it's obligations when they arise and for the companies to make a profit.

The use of models is the reason why sometimes there are hard markets in insurance and at other times there are soft markets.

Cheers!

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Transcultural global ethics always maintains the value of human rights. Have Google’s operations been consistent with the value

sp2606 [1]

Many activists and watchdogs argue that Google has not always done enough to promote or even protect human rights around the world. This is usually the result of efforts by Google to market its search engine in nations like China, where the state has an interest in maintaining censorship of search results. The project, known as Dragonfly, was recently abandoned by Google.

In recent years, Google was among the companies that faced criticism for marketing an app that allowed men in Saudi Arabia to track the locations of their wives by using their cell phones. This was seen as an affront to women's rights, and the company withdrew the product after criticism from the media and shareholders. Google's interest in artificial intelligence has also led to criticism about its commitment to ethical practices and to human rights.

At the same time, there is no doubt that Google has expanded people's access to information and to many other online services around the world. It has made several global public statements against censorship. Its most vocal critics, indeed, have pointed to its previous stands for free access to information in pointing out the hypocrisy of Dragonfly and other ventures.

4 0

3 years ago

The Murdock Corporation reported the following balance sheet data for 2021 and 2020:

Alex_Xolod [135]

Answer:

The Murdock Corporation

Statement of Cash Flows for the year ended December 31, 2021

Operating activities (only):

Net income $69,000

Depreciation expense 51,100

Gain on sale of securities (6,400)

Gain on sale of equipment (1,950)

Changes in working capital:

Accounts receivable (13,650)

Inventory (21,900)

Prepaid insurance 690

Accounts payable (74,230)

Salaries payable (6,400)

Notes payable (current) (51,900)

Cash flow from operations ($55,640)

Explanation:

a) Data and Calculations:

2021 2020 Change

Cash $98,465 $34,355 +$64,110

Available-for-sale debt securities

(not cash equivalents) 25,000 104,000 -79,000

Accounts receivable 99,000 85,350 +13,650

Inventory 184,000 162,100 +21,900

Prepaid insurance 3,210 3,900 -690

Land, buildings, and

equipment 1,288,000 1,144,000 +144,000

Accumulated depreciation (629,000 ) (591,000 ) +38,000

Total assets $1,068,675 $942,705

Accounts payable $93,440 $167,670 -74,230

Salaries payable 27,600 34,000 -6,400

Notes payable (current) 42,100 94,000 -51,900

Bonds payable 219,000 0 +219,000

Common stock 300,000 300,000 0

Retained earnings 386,535 347,035 +39,500

Total liabilities and

shareholders' equity $1,068,675 $942,705

Additional information for 2021:

1. Available=for-sale debt securities:

Cost = $79,000

Sales = 85,400 Cash

Profit = $6,400

2. Equipment:

Cost = $20,000

Acc. Dep. 13,100

Book value 6,900

Cash sales 8,850

Profit = 1,950

Accumulated Depreciation:

Beginning balance $591,000

Sale of equipment (13,100)

Depreciation expense 51,100

Ending balance 629,000

3. Bonds issue = $219,000

Interest on bonds = 13,140 ($219,000 * 6%)

4. Purchase of new equipment = $164,000

5. Cash dividends = $29,500

6. Net income = $69,000

Statement of Cash Flows for the year ended December 31, 2021

Operating activities:

Net income $69,000

Depreciation expense 51,100

Gain on sale of securities (6,400)

Gain on sale of equipment (1,950)

Changes in working capital:

Accounts receivable (13,650)

Inventory (21,900)

Prepaid insurance 690

Accounts payable (74,230)

Salaries payable (6,400)

Notes payable (current) (51,900)

Cash flow from operations ($55,640)

Investing activities:

Sale of equipment 8,850

Purchase of equipment (164,000)

Available-for-sale debt securities

(not cash equivalents) 85,400

Cash flow from investing ($69,750)

Financing activities:

Issue of bonds 219,000

Dividends (29,500)

Cash from financing $189,500

Net Cash flows $64,110

Reconciliation:

Beginning cash balance $34,355

Net Cash flows $64,110

Ending cash balance $98,465

5 0

2 years ago

A company has net income of $865,000; its weighted-average common shares outstanding are 173,000. Its dividend per share is $1.3

Elenna [48]

Answer:

c. 21.00

Explanation:

The formula to compute the price earning ratio is shown below:

Price-earnings ratio = (Market price per share) ÷ (Earning per share)

where,

Market price per share is $105

And, the earning per share would be

= Net income ÷ weighted-average common shares outstanding

= $865,000 ÷ 173,000 shares

= $5

Now put these values to the above formula

So, the per share would equal to

= $105 ÷ $5

= 21

7 0

3 years ago

Aloha Bags, Inc. produces student book bags that sell for $20 each. For the coming year, management expects fixed costs to be $2

netineya [11]

Solution :

a). At the break even units, the total contribution margin = fixed expenses

We know that : (Selling price - variable cost) x units sold = fixed expenses

i.e. (20-14)x = 225,000

6x = 225,000

x = 37,500

Therefore, the number of units sold, x = 37,500

So, the break even analysis = 37,500 x 20

= 750,000

b). $\text{Contribution margin ratio} = \frac{\text{(Sales - variable cost) }}{\text{sales}}$

$=\frac{20-14}{20}$

= 30%

The Breakeven sales = $\frac{\text{fixed cost}}{\text{Contribution margin ratio}}$

$=\frac{225,000}{30\%}$

= 750,000

c). $\text{Margin of Safety ratio } = \frac{\text{(Sales - Breakeven sales) }}{\text{sales}}$

$=\frac{1,2000,000-750,000}{1,200,000}$

= 37.5%

d). Units needed :

$(20-14)x - 225,000 = 150,000$

$6x - 225,000 = 150,000$

$6x = 375000$

$x=62,500$ units

Therefore, the sales required = 62,500 x 20

= 125,000

4 0

2 years ago

Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a u

aliina [53]

Answer:

Great Adventures

Journal Entries on July 1, 2022:

Debit Equipment Account with $12,000

Credit Cash Account with $12,000

To record the purchase of a used Suburban.

Debit Vehicle Insurance with $1,800

Credit Cash Account with $1,800

To record payment of one year vehicle insurance.

Debit Equipment Account with $3,000

Credit Cash Account with $3,000

To record the payment for repainting and placing logo.

Debit Equipment Account with $2,000

Credit Cash Account with $2,000

To record deluxe roof rack and trailer hitch on the vehicle.

Maintenance on October 22:

No Journal Entry Required in July.

Explanation:

a) The initial amount spent to purchase the vehicle is capitalized, i.e. recognized in the asset's account (Equipment Account).

b) Vehicle insurance is not capitalized. It is a period cost that should be recognized in the income statement.

c) Repainting and putting logo on the vehicle is capitalized because it adds to the value and brings the vehicle to its use. All expenditure that helps to bring an asset to its use and increases the future value is capitalized.

d) The deluxe roof rack and trailer hitch is also capitalized since they increase the future benefits of the vehicle.

7 0

3 years ago