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TEA [102]
2 years ago
12

Suppose a life insurance company sells a ​$290 comma 000 ​one-year term life insurance policy to a 20​-year-old female for ​$280

. The probability that the female survives the year is 0.999644. Compute and interpret the expected value of this policy to the insurance company.
Business
1 answer:
Monica [59]2 years ago
4 0

Answer:

The insurance company will gain an expected value $176.66032

Explanation:

The expected value is the gain or loss of an event and is calculated each outcome by its probability.

In our case we have to consider all events as follows;

The probability of dying means the insurance company will have a loss of $290,000 and gain $280 which is the cost of the policy. The probability of this happening=(1-probability of living)=(1-0.999644)=0.000356

The probability of living means the insurance company will gain $280, and the probability of this happening=0.999644

The gain or loss from death=280-290,000=-$289,720

The gain or loss from living=$280

Expected value=(The loss from death×probability of death)+(The gain from living×probability of living)

where;

The loss from death=-$290,000

Probability of death=0.000356

The gain from living=$280

Probability of living=0.999644

replacing;

Expected value=(-290,000×0.000356)+(280×0.999644)

Expected value=(-103.24+279.90032)

Expected value=$176.66032

The insurance company will gain an expected value $176.66032

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alina1380 [7]

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In this scenario, the best thing to do is being honest, especially by alerting your backers, guarantors, and all of the people who provided the fund through the crowdfunding site.

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Complete Question:

If you have a successfully crowdfunded product and you know you are going to miss your advertised ship date, what should you do?

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3 0
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Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budg
Sati [7]

Answer:

Bramble Corporation

The difference between cash receipts and cash disbursements for December would be:

=  $71,000

Explanation:

a) Data and Calculations:

Balance Sheet October 31

Assets Cash                            $ 21,400

Accounts receivable                  71,400

Merchandise inventory           156,800

Property, plant and equipment,

net of $573,400 accumulated

depreciation                        1,095,400

Total assets                      $ 1,345,000

Liabilities and Stockholders' Equity

Accounts payable              $ 255,400

Common stock                      821,400

Retained earnings                268,200

Total liabilities and

stockholders' equity      $ 1,345,000

                                     November       December      January

Budgeted sales            $320,000        $300,000   $290,000

Cash Collections:

55% month of sale         176,000            165,000      159,500

45% following month       71,400             144,000      135,000

Total collections          $247,400         $309,000   $294,500

Cost of goods sold     $224,000         $210,000    $203,000

=  (70% of Sales for the month)

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Goods available           $371,000        $352,000

Beginning Inventory      156,800            147,000       142,100

Purchases                    $214,200        $205,000

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Payment to suppliers   255,400           214,200      205,000

Other monthly exp.        23,800             23,800

Total disbursements $279,200         $238,000

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Cash receipts             $247,400         $309,000

Cash disbursements $279,200         $238,000

Difference                    ($31,800)           $71,000

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Pavlova-9 [17]

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c) Quantity of chocolate purchased by the government will increase

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7 0
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