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ExtremeBDS [4]
4 years ago
14

Suppose a company charges an annual premium of $120 for an insurance policy for minor injuries. Actuarial studies show that in c

ase of an injury claim, the company will pay out an average of $900 for outpatient care and an average of $3000 for an overnight stay in the hospital. They also determine that, on average, each year there are five claims made that result in outpatient care for every 1000 policies and three claims made that result in an overnight stay out of every 1000 policies. What is the expected annual profit of an insurance policy for the company
Business
1 answer:
Mars2501 [29]4 years ago
7 0

Answer:

annual profit per insurance policy 107.4 dollars

Explanation:

for every 1,000 insurance policy:

revenue 1,000 x 120 = 120,000

outpatient cost: 5 x 900 = 3,600

overnight cost: 3 x 3,000 = 9,000

Profit: 107,400

We now divide over 1,000 policies:

107,400 / 1,000 = 107.4

Each policy is expected to generate a gross profit of 107.4 dollars

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Ludmilka [50]

Answer:

$0.10 is the correct answer.

Explanation:

8 0
3 years ago
98 points! Please answer 1 sentence or more for each question
Bad White [126]

Answer:

1.) idk

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4.) 17 maybe 18

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Hope This Helps!     Have A Nice Day!!

3 0
3 years ago
Read 2 more answers
plans to pay dividends of $1.36, $1.15, $1.35, and $.40 at the end of the next four years, respectively. After that, the company
Len [333]

Answer:

MV=$46.5

Explanation:

MV=D1/(Ke-g)

Mv=1.15/(.114-0.089)

MV=46.5

Where MV=?

Ke=11.4%

g=8.95% it calculated by discounting all dividends with Ke

D1=1.15

4 0
3 years ago
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Digby's product manager is considering lowering the price of the Daft product by $2.50 and wants to know what the impact will be
Dvinal [7]

Answer:

D.  34.00%

Explanation:

The computation of the new contribution margin is shown below:

As we know that

Contribution Margin = Net Sales Revenue - Variable Expenses

where,

Net sales revenue is

= 604 units × $32.5

= $19,630

The variable expense = Total material cost + total labor cost

Total Material Cost = 604 units × $14.36 = $8,673.44

Total Labor Cost = 604 units × $7.09 = $4,282.36

So, the variable expense is

= $8,673.44 + $4,282.36

= $12,955.8

Now

Contribution margin = $19,630 - $12,955.8 = $6,674.2

And,

Contribution margin ratio = Contribution margin ÷ net sales

So,  Contribution margin = $6,674.2 ÷ $19,630

= 34.00%

4 0
4 years ago
Phoenix Pump and Filter projects that the cost of steel bodies for Model R910 valves will increase by $2.50 every 3 months. If t
katrin2010 [14]

Answer:

$1023.98

Explanation:

Using the standard notation equation for annual payment and for arithmetic gradient to calculate the present worth of a unit's costs; we have the following corresponding expression.

P = A (P/A, i, n)         &     P = G (P/G, i, n)

where;

A = annual payment

G = arithmetic gradient

n = number of years

i = annual interest rate

From the question;

the payment  period = compounding period

∴ quaterly interest rate = 3%

The present worth value of the unit's cost is therefore shown as

P = 90 (P/A, 3%, 12) + 2.5(P/G, 3%, 12)

P = 90(9.954) + 2.5(51.2481)

P = $1023.98

∴ The present worth value of the unit's cost = $1023.98

7 0
3 years ago
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