Policy APolicy BFire/Theft$10,000$15,000A company is considering two insurance plans with coverage andpremiums shown in the table. (For example, this means that $50 buysone unit of plan A, consisting of $10,000 fire and theft insurance and$180,000 of liability insurance.) Answer parts (a) and (b).Liability$180,000$120,000Premium$50$40***(a) The company needs at least $300,000 fire and theft insurance and at least $3,600,000 liability from these plans,How many units should be purchased from each plan to minimize the cost of the premiums? What is the minimumpremium?The company should purchase 12 units of Policy A and 12 units of Policy B, for a premium of $ 1080(b) Suppose the premium for policy A is reduced to $25. Now how many units should be purchased from each plan tominimize the cost of the premiums? What is the minimum premium?The company should purchaseunits of Policy A and units of Policy B, for a premium of $

Answer to (1) Suppose : Units of A need to added = X Units of B need to added = Y From the question…

Answered: Policy A Policy B Fire/Theft A company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Chapter 8Financial Planning Exercise 6Life insurance premiums and comparison of types EXHIBIT 8.2 Representative Annual Renewable Term Life Insurance Premiums: $100,000 Policy, Preferred Nonsmoker Rates When you buy term life insurance, you're buying a product that provides life insurance coverage and nothing more. This table shows representative rates for several age categories and selected policy years; actual premiums increase every year. As you can see, females pay less than males for coverage, and premiums increase sharply with age. AGE 25 AGE 40 Policy Year Male Female Male Female 1 $164 $143 $188 $178 5 $167 $150 $228 $225 10 $174 $163 $297 $264 15 $186 $176 $388 $330 20 $228 $225 $550 $443 EXHIBIT 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy This table shows representative annual premiums for $100,000 of level premium term life…
14. ABM company purchased a two-year fire insurance coverage policy on June 1, 20XX with a cost of ₱200,000. At its December 31, 20XX, how much should be recorded as an expense? A. ₱100,000 B. ₱50,000 C. ₱200,000 D. ₱0
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eBook Chapter 8Financial Planning Exercise 6Life insurance premiums and comparison of types EXHIBIT 8.2 Representative Annual Renewable Term Life Insurance Premiums: $100,000 Policy, Preferred Nonsmoker Rates When you buy term life insurance, you're buying a product that provides life insurance coverage and nothing more. This table shows representative rates for several age categories and selected policy years; actual premiums increase every year. As you can see, females pay less than males for coverage, and premiums increase sharply with age. AGE 25 AGE 40 Policy Year Male Female Male Female 1 $164 $143 $188 $178 5 $167 $150 $228 $225 10 $174 $163 $297 $264 15 $186 $176 $388 $330 20 $228 $225 $550 $443 EXHIBIT 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy This table shows representative annual premiums for $100,000 of level premium term…
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