1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
marishachu [46]
3 years ago
12

Ricardo paid an annual premium of $1,200 in total liability coverage for his car, including up to $200,000 in bodily injury cove

rage and $100,000 in property damage coverage. Ten years into his policy, Ricardo caused an accident that resulted in the other driver claiming $40,000 in medical costs and $20,000 in car damage. Did the cost of the annual premiums outweigh the benefit of transferring the risk to the insurance company
Business
1 answer:
Umnica [9.8K]3 years ago
3 0

Answer:

No, the cost of the annual premium for 10 years was less than the accident claims

Explanation:

Since in the question it is mentioned that the annual premium is $1,200, $200,000 is the bodily injury coverage and $100,000 should be the property damage coverage

Also the $40,000 and $20,000 represent the medical cost and the car damage

So here the cost should not outweight the benefit of the transferring the risk as the annual premium cost for ten years should be lower than the accident claims

You might be interested in
How does the internet help consumers make well-informed decisions?
Rasek [7]

Because the internet make it so much easier for consumers to do research before making decision.

Through the internet, the consumers could know the credibility of a certain product by reading past experiences of other consumers that have used it before. Not only that, the consumers might know the side effects of the product which might be intentionally hidden by the producer.

3 0
2 years ago
Read 2 more answers
During the current year, Comma Co. had outstanding: 25,000 shares of common stock, 8,000 shares of $20 par, 10% cumulative prefe
irina [24]

Answer:

The basic earnings per share for the present year is $7.36 per share

Explanation:

The basic earnings per share for the current year of Comma is computed as:

= (Net Income - preferred stock) / Outstanding shares

where

Net Income is $200,000

Preferred stock is computed as:

= Shares × 10% × Price × 10%

= 8,000 × 10% × $20

= 800 × $20

= $16,000

Outstanding shares - 25,000

Putting the values above:

= ($200,000 - $16,000) / 25,000

= $ 184,000 / 25,000 shares

= $7.36 per common share

8 0
3 years ago
The process that falls between buying for a new need and making a routine repurchase is called
Archy [21]

Answer:

Modified Rebuy

Explanation:

Modified rebuying is the process whereby an individual or an organization makes a purchase that have been previously purchased but this times makes changes to some elements different from the previous purchase like change of suppliers, terms, price and so on. In this case, the buyer reviews the buying situation. Here, the buyer is interested in modifying the specifications of goods previously purchased.

7 0
3 years ago
Depreciation--Jerry Company purchased machinery for $315,000 on May 1,2020 . It is estimated that it will have an useful life of
Gemiola [76]

Answer:

The depreciation for the first year is $75,000

Explanation:

In working hours method the depreciation on a fixed asset is charged using the ratio of numbers of hours utilized by the asset in a period and lifetime working capacity in hours.

First, we need to calculate the Depreciable value

Depreciable value = Cost of Asset - Salvage value = $315,000 - $15,000 = $300,000

Depreciation = Depreciable value x Numbers of hours worked / Total working capacity of Asset = $300,000 x 25,000 / 100,000 = $75,000

6 0
2 years ago
Your employer, a mid-sized human resources management company, is considering expansion into related fields, including the acqui
Anni [7]

Answer:

a. Debt holders have first claim on corporate value. The Preferred stockholders then have next claim and remaining is left for common stockholders.

b. The value of a financial asset is equal to present value of future cash flows which is provided by the asset. When investor buys a share of stock, (s)he typically expects to receive cash in the form of dividends and to sell the stock to receive cash from sale. However, the price any investor receives is highly dependent upon the dividends which the next investor expects to receive, and so on. Thus, the stock's value depends on cash dividends that the company is expected to provide and the discount rate used to find the present value of those dividends.

d. The formula to calculate present value of expected free cash flows is:

PVn=CFn(1+in)n

The formula for the present value of expected free cash flows when discounted at WACC is:

PV=∑Nn=0CFn(1+in)n

Explanation:

a. Debt holders have first claim on corporate value. The Preferred stockholders then have next claim and remaining is left for common stockholders.

b. The value of a financial asset is equal to present value of future cash flows which is provided by the asset. When investor buys a share of stock, (s)he typically expects to receive cash in the form of dividends and to sell the stock to receive cash from sale. However, the price any investor receives is highly dependent upon the dividends which the next investor expects to receive, and so on. Thus, the stock's value depends on cash dividends that the company is expected to provide and the discount rate used to find the present value of those dividends.

d. The formula to calculate present value of expected free cash flows is:

PVn=CFn(1+in)n

The formula for the present value of expected free cash flows when discounted at WACC is:

PV=∑Nn=0CFn(1+in)n

8 0
3 years ago
Other questions:
  • Doss is vice president of marketing research for General Mills. The chefs at General Mills bring three new cookie recipes to Dos
    6·1 answer
  • LTM, Inc. has an issue of preferred stock whose par value is $1,000. The preferred stock pays a 4.5% dividend. If investors requ
    10·1 answer
  • On November 1, Ashton sells her interest in XYZ partnership to Wayne for $200,000 cash and a release of liability of $30,000. As
    7·1 answer
  • You purchase 4,000 bonds with a par value of $1,000 for $978 each. The bonds have a coupon rate of 7.7 percent paid semiannually
    12·1 answer
  • In 2013, the market price for a 3,000 square foot home in south tampa, florida was $350,000 and 358 new homes were built. in 201
    14·1 answer
  • Diego Company manufactures one product that is sold for $75 per unit in two geographic regions—the East and West regions. The fo
    10·1 answer
  • You are 22 years old, unmarried, have no children, and a take-home pay of $2,500 per month. You depended on your parents while a
    7·1 answer
  • A project with an initial cost of $27,250 is expected to generate cash flows of $6,600, $8,700, $9,100, $8,000, and $7,400 over
    7·1 answer
  • To estimate the value of a nonconstant growth stock, we can estimate the value of each dividend during the period of nonconstant
    6·1 answer
  • Whole Grain Bakery purchases an industrial bread machine for $24,500. In addition to the purchase price, the company makes the f
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!