Answer:
A) The amount of the premium in fair insurance policy that replaces Beths car, must be equal to the probability or expectation of claim of car theft.
Therefore, the Premium amount = 20000 x (1/200)
= 20000 (0.005)
= $100
B) If an Insurance company charges 0.6% for replacing a stolen car, then the policy will cost beth:
20000* 0.6%
= 12,000/100
= $ 120
C) To be risk-neutral means to be indifferent to the risk. This means that Beth would be indifferent. She most likely will be focused on maximizing value for money. In other words, she will NOT pay for the insurance policy in part b because part A provides her with the exact (or fair) premium for her insurance.
D) The moral hazard problem is this, people tend to become more careless with an insurance policy in place. This moral hazard arises form the knowledge that there is an insurance policy that caters to their risks.
As a matter of practice, therefore, insurance companies factor this increased risk into their premiums. Where the premium was supposed to be $100, they may charge $120.
In summary, it means that Beth most likely will move from becoming risk neutral to becoming (to a certain degree) more risk loving.
Cheers!
Answer: The answer is C Monitoring the budget
Answer: $33,280
Explanation:
With FIFO, materials cost is added at the beginning.
Cost per unit of materials in production:
= 15,000 / 10,000
= $1.50
Cost per unit of conversion:
= 25,000 / Equivalent unit of production for conversion
Equivalent unit of production for conversion:
2,000 units were not transferred at the end of the month seeing as only 8,000 units were:
= 8,000 + (2,000 * 70%)
= 9,400 units
= 25,000 / 9,400
= $2.66
Amount transferred:
= 8,000 units * (Material cost + Conversion cost)
= 8,000 * (1.50 + 2.66)
= $33,280
Teaming bc when she worked together, they got much more work done.
Answer:
after yopu record the transaction using the double entry sysem, then you must identify the category which these balances belong to such as Assets, expenses, Liabilities, Income or Equity.
It is only after this identification we can apply these to calculate the overal financial productivity of the organization or the profit. because then we can identify the effect these balances have upon the profit!
Explanation: