Car rental agency offers insurance

Assignment Help Science

Reference no: EM132738723

1. Suppose that a car rental agency offers insurance for week that will cost $10 per day. A minor fender bender will cost $ 1,500, while a major accident might cost $ 15,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance or do not take the insurance. The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you will involved in a fender bender, or that you would be involved in a major accident. Assume that researched insurance industry statistics and found out that probability of a major accident is 0.05% and that the probability of a fender bender is 0.16%. What is the expected value decision? Would you choose this? Why or why not? What would be some alternate ways to evaluate risk?

2. Suppose that the service rate to a waiting line system in 10 customers per hour (exponentially distributed). Analyze how the average waiting time is expected to change as the arrival rate varies from two to ten customers per hour ( exponentially distributed).

Reference no: EM132738723

Questions Cloud

Find what the company total fixed expenses are p : Net operating income is P30,000, and its selling and administrative expenses total P140,000. The company's total fixed expenses are P

Analyze an artifact of popular culture : Create a logical written argument about values and popular culture which includes scholarly research. Analyze an artifact of popular culture from multiple.

Marketing decision variables are price : Four key marketing decision variables are price (P), advertising (A), transportation (T), and product quality (Q).consumer demand (D) is influence by variables

What the order point would be : Odyssey Company, Assuming that the units of Material Y will be required evenly throughout the year, the order point would be ________ units

Car rental agency offers insurance : Suppose that a car rental agency offers insurance for week that will cost $10 per day. A minor fender bender will cost $ 1,500, while a major accident

Defining agacnp role of assessing the health and wellness : Write a 750-1,000 word essay defining the AGACNP role of assessing the health and wellness of a specific patient population. Your essay should include three to.

What amount of payroll department costs chargeable to depart : Other costs accumulated in the Payroll Department amounted to P200,000. The amount of Payroll Department costs chargeable to Department C is P

Prepare an unadjusted trial balance as of October : Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $800. Prepare an unadjusted trial balance as of October

What the total manufacturing cost recorded on job : What the total manufacturing cost recorded on Job 1501 would be P? John Company uses a predetermined overhead rate based on machine-hour

User Account

All Pages