What is the value of the firm

Assignment Help Business Economics
Reference no: EM13978670

1) Suppose in a firm, the probability of worker injury is = 1/20. The losses from an injury is $100,000. Suppose the cost of residual uncertainty is $3,000 and the cost from other elements of cost of risk is zero. The value of firm without risk is $2 million. What is the value of the firm providing given information?

2) Suppose the firm purchases a full insurance, costing $7,000. What is the value of the firm?

3) Greater American Insurance Group underwrites the property risk from Buckeye Brewery. The policy involves a deductible of $300,000. The premium that Greater American charges is $50,000. Is this premium actuarially fair? Justify your answer with the calculation

Reference no: EM13978670

Questions Cloud

Explain all the contributing elements to this culture clash : What should Liu do? He has only minutes to determine how he can juggle these competing demands and how he should approach these issues.
Find the magnitude and direction of the magnetic field : Find the magnitude and direction of the magnetic field at point p due to two 1.50mm segments of wire (not the entire wire) that are opposite each other and each 8.00cm from p.
After tax returns on a taxable bond : In order for you to be indifferent between the after tax returns on a taxable bond paying 2.49% and a tax-exempt bond paying 2.12%, what would your tax bracket need to be? (How to calculates )
What is effect of investment on real assets on value of firm : What is the effect of an investment on real assets on the value of the firm and why? How can we evaluate and compare projects with unequal lives? What is the risk on real investments and how can be measured? How important are statistics and computers..
What is the value of the firm : Suppose in a firm, the probability of worker injury is = 1/20. The losses from an injury is $100,000. Suppose the cost of residual uncertainty is $3,000 and the cost from other elements of cost of risk is zero. The value of firm without risk is $2 mi..
Best-selling author decides to cash in on her latest novel : A best-selling author decides to cash in on her latest novel by selling the rights to the book’s royalties for the next six years to an investor. Royalty payments arrive once per year, starting one year from now. In the first year, the author expects..
Prepare the intercompany elimination and workpaper entry : P Company acquired 27,000 shares of the common stock of S Company on 1/1/15, for $710,000 cash. The stockholders’ equity section of S Company’s balance sheet on that date was as follows: What is the “REAL” journal entry to record the stock acquisitio..
Value of quarantine and isolation in controlling disease : Assess the value of quarantine and isolation in controlling disease due to biological terrorism. Use a specific example to support your position
What are the goals of a health care facility : Describe what replacement decisions are within capital investments and give two health care related examples.

Reviews

Write a Review

Business Economics Questions & Answers

  Monopolistic competition implies

As the name monopolistic competition implies, a firms decision in this setting will in certain ways resemble _____________ and in other ways resemble___________?

  Explain how many units of blood wil be used in the us

Explain how many units of blood wil be used in the US. What is the level of consumer and prduce surplus.

  The federal funds rate

If U.S. interest rates fall relative to Japanese interest rates and Japanese inflation falls relative to U.S. inflation, then the: The Federal funds rate:

  Illustrate what dollar amount will the profit margin

illustrate what dollar amount will the profit margin.

  Illustrate what are short- and long-term economic profits

Illustrate what are short- and long-term economic profits and costs associated with our current high federal government budget deficits.

  Maintain a profit margin that is acceptable to shareholders

As a member of the Board of Directors of General Motors Corporation, you are continually concerned about the level of productivity of the company’s work force. What can management do to create enhanced productivity levels in order to maintain a profi..

  Qthe long-run cost function for leanns telecommunication

q.the long-run cost function for leanns telecommunication firm is cq 0.03q2. a local telecommunication tax of 0.01 has

  Intermediaries come from a competitive marketplace

change if buyers pay $8 every unit to the intermediary but sellers offer to rebate part of that expense to buyers.

  Avoidable fixed cost

Suppose that, in the long run, a pizza firm’s variable costs are V C(Q) = Q2/2 (where Q is the number of pizzas produced each day), its marginal cost is MC(Q) = Q, and there is an avoidable fixed cost of $50 per day. In the long run, there is free en..

  A demand curve that is horizontal indicates that the commodi

A demand curve that is horizontal indicates that the commodity

  Affect the amount that individuals invest in capital

In the US, realized capital gains are taxed at 15% if they are held for more than a year. Suppose instead that we include realized capital gains (those held for more than a year and less than a year) in income instead so that they are added to an ind..

  How many guitars will be sold after the tax is imposed

What proportion of the tax will be paid by the suppliers of Martin guitars? How many guitars will be sold after the tax is imposed?

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