18. Troy's Tire Mart has a replacement value of $965, 000 and is insured for $588, 000, with an 80% coinsurance feature. How much of the loss will be paid by his insurance company if a fire causes $710, 000 in losses? $568, 000 $735, 000 $772, 000 $540, 777.20
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- Eddie’s Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000. Annual maintenance costs for the sprinkler system are $400. If the sprinkler system is installed, the system must be included in the shop’s value for insurance purposes, but the insurance premium will reduce to $0.40 per $100 of coverage. Eddie uses a MARR of 15 %/year. Solve, a. What is the present worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on present worth? c. Is the sprinkler system economically justified?Eddie’s Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000. Annual maintenance costs for the sprinkler system are $400. If the sprinkler system is installed, the system must be included in the shop’s value for insurance purposes, but the insurance premium will reduce to $0.40 per $100 of coverage. Eddie uses a MARR of 15% per year. What is the present worth of this investment? What is your recommendation to Eddie?1. Greenfield purchased a building ten years ago for $400,000. Since then, the company has maintained the same $400,000 building limit on its commercial property insurance policy. This policy has an 80 percent co-insurance clause and a $10,000 deductible. Recently Greenfield had a tornado claim for $330,000 in damages to the building. When the insurance company adjuster examined the property she discovered the building had an Actual Cash Value of $600,000. Which of the following payments is the insurer likely to make to Greenfield? a. $330,000 b. $320,000 c. $310,000 d. $265,000 e. $216,875
- 4. A business sells 5,000 appliances at P8,000 each, which carry a one-year repair warranty. If minor repairs were to be required to appliances sold in 2022, the repair cost would be P600 each. If major repairs were needed on all goods sold, the cost would be P1,500 each. It is estimated that 40% of goods sold in 2022 will have no defects, 45% will have minor defects, and 15% will have major defects. What amount of provision on product warranty should the company recognize for 2022?A company buys a machine for $180,000 that has an expected life of nine years and no salvage value. The company expects an annual net income (after taxes of 30%) of $8,550. What is the accounting rate of return? a. 4.75% c. 2.85% e. 6.65% b. 42.75% d. 9.50%8) On January 1, 2019, Seabreeze Construction Company owned 4 dump trucks, 2 excavators and other construction machinery with a total value of $950,000. During 2019, Seabreeze Construction bought two new trucks paying a total of $120,000. On December 31, 2019, the market value of all the firm's trucks and construction machinery was $1,020,000. a)What was Seabreeze’s gross investment in 2019? b)What was the amount of depreciation in 2019? c)What was the net investment in 2019?
- All Insure issued a policy for $10 Million Auto liability. The underwriter, following company underwriting guidelines to retain only $5 Million liability risk, placed a facultative excess of loss reinsurance contract for $5 million with ReinsureRE. The insured caused a pile-up car/truck collision with total loss amount of $8 Million in loss payments. How much of the $8 Million will be covered by the excess of loss contract?HANGANG Park has life insurance policies on its officers’ lives. Annual premiums amount to P50,000. At the end of 2020, cash surrender value of the policies totaled P182,000. Dividends received by HANGANG from the insurance company amounted to P5,000 in 2020. The insurance expense recognized by HANGANG Park in 2020 was P35,000.What was the amount of cash surrender value of these policies on January 1, 2020? a. P172,000 b. P162,000 c. P142,000 d. P102,000Jackson Insurance Company insures Build-A-Car for fire insurance. Jackson reinsures 40% of this exposure with GetPaid Reinsurance company on a pro-rata basis. If a $16,570 insured loss occurs at Build-A-Car, how much money will Build-A-Car receive?
- Lotus purchases a new machine for $20,000, and spends $2,000 on sales taxes, $500 for delivery, and $300 for installation of the new machine. What is the amount that will be capitalized on the company’s balance sheet? $22,500 $20,000 $22,000 $22,800Sunland Company self-insures its property for fire and storm damage. If the company were to obtain insurance on the property, it would cost them $1970000 per year. The company estimates that on average it will incur losses of $1610000 per year. During 2021, $705000 worth of losses were sustained. How much total expense and/or loss should be recognized by Sunland Company for 2021?8. A company pays one of its employees $800 per week. How much is the amount withheld from his pay for Social Security taxes? Group of answer choices A.$49.60 B.$11.60 C.$61.20 D.$34.52 9.Squeaky Clean laundromat purchased $6,000 worth of washing machines which are expected to last for 5 years, at which time they will have a trade-in value of $1,000. Calculate the annual depreciation using the straight line depreciation method. Group of answer choices A.$1,200 B.$1,150 C.$1,000 D.$950 10. On July 1, 2017, a company purchased a delivery van for $32,000. In five years, when they trade in the van, they will receive $3,000 toward the purchase of the next model. Using the straight-line method of depreciation, how much will they be allowed to depreciate during the first year? Group of answer choices A.$6,400 B.$5,800 C.$3,200 D.$2,900 ABC Company purchased a $65,000 piece of equipment which had an expected life of 10 years and a scrap value…