rance company premium cost is $500 and its target loss ratio is 75%. If this company utilizes a technology that decreases losses by 40%, how much should the average premium cost be with this new technology?
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the average insurance company premium cost is $500 and its target loss ratio is 75%. If this company utilizes a technology that decreases losses by 40%, how much should the average premium cost be with this new technology?
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- An insurance policy sells for $1200. Based on past data, an average of 1 in 50 policyholders will file a $10,000 claim, an average of 1 in 100 policyholders will file a $50,000 claim, and an average of 1 in 250 policyholders will file an $80,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss? The expected value is $ (Simplify your answer.) The expected (Simplify your answer.) is $The company has Fixed cost of 500,000 and CMR of 30%. If the company projected that net loss of 50,000 will occur in 2020 due to pandemic; What is the projected sales in 2020?Joycast expects that there is an 5% chance of a loss of $5 million next year. If Joycast conducts new safety policies, the chance of this loss will be 2.5%. The new safety policies will cost $210000 immediately. Assume that the beta of the loss is 0, and the risk-free rate of interest is 4.4%. If Joycast is uninsured, the NPV of implementing the new safety policies is closest to: $329732 $-90268 $29464 $329732
- Your company is considering granting credit to a new customer. The variable cost per unit is RO 20, the current price is RO 25, and the monthly required return is 2.5%. What is the break - even probability of default if we assume a repeat business? Interpret.A construction company plans to invest in a housing project. There is a 30% chance that the company will lose $212,234 a 30% chance it will lose $181,856, and a 40% chance of a $319,004 profit. Based ONLY on this information, how much can the company expect to gain or lose. Round to the nearest hundredth, gains should be positive and losses negative.Neighborhood Insurance sells fire insurance policies to local homeowners. The premium is $110, the probability of a fire is 0.1%, and in the event of a fire, the insured damages (the payout on the policy) will be $100,400.a. Suppose you own the entire firm, and the company issues only one policy. What are the expected payout, expected profit, variance and standard deviation of your scenario? (Enter all answers in dollars, rounded to 2 decimal places. Round Profit to the nearest whole dollar.) b. Now suppose your company issues two policies. The risk of fire is independent across the two policies. Make a table of the payout and profit, along with their associated variances and standard deviations. (Enter all answers in dollars, rounded to 2 decimal places. Round Profit to the nearest whole dollar.) c. Continue to assume the company has issued two policies, but now assume you take on a partner, so that you each own one-half of the firm. Make a table of the possible payout and profit…
- A seaI firm Trodent’s customers expects to decrease downtime by 0.3 as a result of the new seal design. If Iost production would have cost the company $110,000 per year for the next four years, how much could the company afford to spend now on the new seals, if it uses an interest rate of 0,1 2 per year?Neighborhood Insurance sells fire insurance policies to local homeowners. The premium is $110, the probability of a fire is 0.1%, and in the event of a fire, the insured damages (the payout on the policy) will be $100,400.a. Suppose you own the entire firm, and the company issues only one policy. What are the expected payout, expected profit, variance and standard deviation of your scenario? (Enter all answers in dollars, rounded to 2 decimal places. Round Profit to the nearest whole dollar.) b. Now suppose your company issues two policies. The risk of fire is independent across the two policies. Make a table of the payout and profit, along with their associated variances and standard deviations. (Enter all answers in dollars, rounded to 2 decimal places. Round Profit to the nearest whole dollar.) c. Continue to assume the company has issued two policies, but now assume you take on a partner, so that you each own one-half of the firm. Make a table of the possible payout and profit…You see an estimate that hourly wage rates will increase by 6 percent next year. What other information do you need to determine the effect of this wage rate increase on the operating profit margin, and why do you need it?
- Swifty Corporation is contemplating the production and sale of a new widget. Projected sales are $360000 (or 75000 units) and desired profit is $45000. What is the target cost per unit? $4.20 $4.80 $5.40 $6.00Red-Star Co. wants to sell an electrical generator for AED 165,000 in 2024. The price of this generator in the market today is AED 94,000 (according to GE company who is the producer of this generator). If the discount rate on this generator is 9.5 percent per year. Do you think the firm will make a profit if they sell this generator? What is the rate that will make the firm breakeven? Note: Profit = Revenue -costDetermine the NPV for the following: An information system will cost $95,000 to implement over aone-year period and will produce no savings during that year. When the system goes online, the companywill save $30,000 during the first year of operation. For the next four years, the savings will be$20,000 per year. Assuming a 12% discount rate, what is the NPV of the system?