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Nonamiya [84]
2 years ago
6

Your home insurance provides for replacement value for personal property losses. A microwave is stolen. It cost $258 two years a

go and has an expected life of six years. A comparable microwave costs $366 today. What amount will the insurance company pay
Business
1 answer:
Bogdan [553]2 years ago
8 0

Answer: $366

Explanation:

Replacement Cost Coverage refers to the valuation methods for the establishment of the value of an insured property which is used in knowing the amount that an insurer will

have to pay in case there is a loss and in such case, the insurance company will have to pay the costs at the present price to replace the damaged product.

Since the comparable microwave costs $366 today, therefore the insurance company will pay $366.

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<u>Particulars           Product A          Product B             Product C </u>

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Machine hours per unit   0.75                 0.25                    1

Contribution per machine hour $2.00   $4.00            $3.00

                                         ($1.50 ÷ 0.75)  ($1.00 ÷ 0.25)   ($3.00 ÷ 1)

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