Answer: $15,000
Explanation: The 80% coinsurance clause on the property means that the insurance policy holder is agreeing to contribute up to 80% of the property's worth. Hence in the event of a loss to the building worth $20,000; the insures policyholder would receive :
(Actual contribution/expected contribution) x value of loss to the property
Where : Expected contribution = 80% of property's worth
ie (80/100) x $400,000 = $320,000
then the insured is to receive: ($240,000/$320,000) x $20,000 = $15,000
Information related is the answer
Answer:
Accountant 34,100 gain
Economist (6,500) loss
Explanation:
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<u>Accountant:</u>
revenue 60,000
operating cost 25,000
Interest expense 900 ( 30,000 x 3%)
net income 34,100
<u>Economist: </u>
revenue 60,000
explicit cost 25,900
<em>implicit cost (opportunity cost):</em>
savings yield:
20,000 x 3% = 600
painter job 40,000
economic loss (6,500)
Answer:
Alternative A will produce the best return.
It has a better present value index which means, the investment yield a better rate.
Explanation:
ALTERNATIVE (a)
125,000 - 100,000 = <em>25,000 NPV</em>
ALTERNATIVE (b)
300,000 - 262,500 = <em>37,500 NPV</em>
ALTERNATIVE (a)
125.000/100,000 = <em>1.25</em>
ALTERNATIVE (b)
300,000/262,500 =<em> 1.1429</em>
