Medical malpractice liability crisis

Assignment Help Financial Management
Reference no: EM131327352

Here the estimated dollars per claim for each year have been adjusted to 2007 dollars to account for inflation, so the values are all compatible. Texas was said to have had a “medical malpractice liability crisis” starting in about 1998 and continuing until the legislature passed tort reforms effective in September 2003, which put caps on certain noneconomic damage awards. During this period premiums increased greatly and doctors left high-risk specialties such as emergency room service and delivering babies, and left high-risk geographical areas as well causing shortages in doctors in certain locations. The data from 1994 until 2001 is the following:

Injury year-Estimated # claims-Estimated $ per claim

1994 -1021 -$415,326.26

1995 -1087 -$448,871.57

1996 -1184 -$477,333.66

1997 -1291 -$490,215.19

1998 -1191 -$516,696.63

1999 -1098 -$587,233.93

2000 -1055 -$536,983.82

2001 -1110 -$403,504.39

Calculate the mean or average number of claims per year for medical malpractice insurance in Texas over the four-year period 1994–1997.

Reference no: EM131327352

Questions Cloud

What is the relationship between hope and action : What is hope? What is the relationship between hope and action? What contributions does theology bring to understanding hope today? What is the relationship between hope and transformation
What is the new mortgage payment : Assuming he can reduce his monthly mortgage payments, what is the new mortgage payment?- Assuming the loan maturity is shortened and using the original monthly payments, what is the new loan maturity?
Considering a project with an initial cost : Peter is considering a project with an initial cost of $42,000 and annual cash inflows of $9,100 a year for six years. What discount rate, when applied to this project, will produce a profitability index of 1.0?
What is the value of lambco to wolfco : Wolfco management is currently considering a merger with Lambco. Both companies are in the same industry, and both companies’ shares sell at a ratio of price to free cash flow of 10. 3 Wolfco has 20 million shares outstanding, selling at a price of $..
Medical malpractice liability crisis : Here the estimated dollars per claim for each year have been adjusted to 2007 dollars to account for inflation, so the values are all compatible. Texas was said to have had a “medical malpractice liability crisis” starting in about 1998 and continuin..
What is the interest rate on the loan : A fully amortizing mortgage is made for $100,000 at 6.5 percent interest. If the monthly payments are $1,000 per month, when will the loan be repaid?
What must monthly payments be over the 10 year period : If the interest rate is 7 percent, what must monthly payments be over the 10-year period?- If the borrower chooses to repay the loan after 5 years instead of at the end of year 10, what must the loan balance be?
What will the monthly payments be : What will the monthly payments be?- What will be the loan balance after 5 years?- If the loan is repaid after 5 years, what will be the yield to the lender?

Reviews

Write a Review

Financial Management Questions & Answers

  Annual cash flows-indifferent in accepting project-rejecting

A project that provides annual cash flows of $12,300 for 9 years costs $70,836 today. If the required return is 3 percent, the NPV for the project is $ _________ and you would accept the project. At a discount rate of _________ percent, you would be ..

  Value-added tax-equivalent of imposing national sales tax

Value-added tax (VAT) is: a direct national tax on the value added in the production of a good (or service) as it moves through various stages of production an indirect national tax levied on the value added in the production of a good (or service) a..

  Treasury bond to hold to maturity

If you invested in a long-term U.S. Treasury bond to hold to maturity, which form of risk should most concern you?

  Ski resort is considering installing new ski lift

The owner of a ski resort is considering installing a new ski lift, which will cost $750,000. Expenses for operating and maintaining the lift are estimated to be $1,500 per day when operating. The owners wish to recover any invested capital within fi..

  Identify an ethical issue the organization either faces

Describe some of the key decisions that Kaiser Permanente its management has faced within the past year or two. Identify an ethical issue the organization (Kasier Permanente) either faces or has faced in the past. If it has not been resolved, provide..

  Market share have to be next year for its profit

Fred Flintstone has just become the product manager for Yabba Dabba Doo, a consumer packaged product with a retail price of $2.00. Retail margins on the product are 33%, while wholesalers take a 12% margin. How many units will Yabba have to sell next..

  Target capital structure-what is the aftertax cost of debt

Mullineaux Corporation has a target capital structure of 75 percent common stock, 15 percent preferred stock, and 10 percent debt. Its cost of equity is 8 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. Th..

  What must be the risk-free interest rate

You buy a share of stock, write a one-year call option with a strike price X = $11, and buy a one-year put option with a strike price X = $11. Your net initial cost to establish the entire portfolio is $10.50. What must be the risk-free interest rate..

  About the investments

The 1-year interest rate is 7% in the U.S. and 3% in Japan. How much would the yen have to appreciate for a U.S. investor to get the same return on both U.S. and Japanese investments? Show you derive the answer.

  European put option with a strike price

Currently, a stock price is $80. It is known that at the end of 4 months it will be either $73 or $90. The risk-free rate is 6% per annum with continuous compounding. What is the value of a 4-month European put option with a strike price of $80?

  What are the total carrying costs

ABC Company sells 2,587 chairs a year at an average price per chair of $153. The carrying cost per unit is $18.42. The company orders 380 chairs at a time and has a fixed order cost of $109.7 per order. The chairs are sold out before they are restock..

  What is present value of your windfall-discount rate

You have just received notification that you have won the $1 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 65 years from now. What is the present value of..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd