1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
julsineya [31]
3 years ago
10

For an auto insurance company, the average cost of collision claims is $500 per year for careful drivers and $3000 per year for

poor drivers. The drivers are risk neutral and know whether they are careful or poor, but the insurance company only knows that 15% of drivers are poor. What is the insurance company's breakeven price for the collision insurance? A. $425 per year B. $450 per year C. $875 per year D. $2,625 per year
Business
1 answer:
Rainbow [258]3 years ago
8 0

Answer:

option (c) $875 per year

Explanation:

Given;

Average cost of collision claims for careful drivers = $500 per year

Average cost of collision claims for for poor drivers = $3000 per year

Poor drivers known by the company = 15%

thus,

Careful drivers = (100% - 15%) = 85%

Therefore,

Insurance company's breakeven price for the collision insurance  

= (Poor drivers known × Average cost of collision for poor drivers ) +( Careful drivers × Average cost of collision claims for careful drivers)

= 0.15 × $3000 + 0.85 × $500

= $450 + $425

= $875 per year

Hence, the correct answer is option (c) $875 per year

You might be interested in
Thomlin Company forecasts that total overhead for the current year will be $11,742,000 with 164,000 total machine hours. Year to
Basile [38]

Answer:

d.$72 per machine hour

Explanation:

Predetermined overhead rate = Budgeted Overheads ÷ Budgeted Activity

therefore,

Predetermined overhead rate = $11,742,000  ÷ 164,000

                                                  = $71.598 or $72

The predetermined overhead rate based on machine hours is $72 per machine hour.

3 0
3 years ago
A state of equity is present when?
Helga [31]

Answer:

A state of Equity is present when there is a fair condition and just inclusion into a society.

Equity exists when those who have been most neglected have equal access to opportunities, power, participation and resources available. They also have good sources to safe, healthy, productive and fulfilled lives.

6 0
3 years ago
An individual involved in the communication process
BabaBlast [244]

Interpersonal communication

4 0
4 years ago
A product modification differs from a line extension in that _______.
dimaraw [331]

Hey! How are you? My name is Maria, 19 years old. Yesterday broke up with a guy, looking for casual sex.

Write me here and I will give you my phone number - *pofsex.com*

My nickname - Lovely

4 0
3 years ago
As the Assistant Human Resources Manager, you have learned from another employee that a co-worker is being harassed by her super
Gwar [14]

Answer:

All of these actions except "nothing unless the victim herself files a claim, because there is no anti-harassment policy, so you have no authority in the matter"

Explanation:

Harassment is legally actionable because it is a form of discrimination. Under EEOC´s guidelines hold rules that applied all times are presumptively discriminatory. Sexual harassment is absolutely unwelcome at the workplace or outside the workplace. No employer is allowed to take sexual favor in exchange for job opportunities or security. It is unlawful to involve the employee in an activity which require sexual favor from her or where she is getting sexually harassed. All the employers have a duty of care to protect their workers and will legally liable for sexual harassment in the workplace if they have not taken any reasonable action to prevent it.

7 0
3 years ago
Other questions:
  • ECG Company recorded two sales on March 1 of $20,000 and $30,000 under credit terms of 3/10, n/30 (3% discount if paid within 10
    6·1 answer
  • How do contact lists differ from an address book?
    13·1 answer
  • When an organization expands into a totally new line of business, it is implementing a strategy of:
    15·1 answer
  • Osage Corporation issued 3,700 shares of stock. Prepare the entry for the issuance under the following assumptions. (Credit acco
    11·1 answer
  • Many catalog companies create special-run issues based on what customers have purchased in the past. For example, customers who
    11·1 answer
  • At the BMW plant in Spartanburg, South Carolina, rather than use a typical order-to-delivery process, it has suppliers deliver p
    9·1 answer
  • Résumés should include the following:
    12·2 answers
  • 2. What are mortgage brokers?
    13·1 answer
  • French mining engineer Henri Fayol defined management as a process involving which of the following?
    10·2 answers
  • What's wrong with this slide?
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!