A company is considering two insurance plans with the following types of coverage and premiums: Fire/Theft Liability Plan A Plan B $20,000 $35,000 $198,000 $126,000 Monthly Premium $75 $57 Premiums are sold in units. For example, one can buy one unit of plan A insurance for $75 per month and receive $20,000 in Fire/Theft insurance. Two units of plan A insurance cost $150 per month and give $40,000 in Fire/Theft insurance. The company wants at least $680,000 in coverage for Fire/Theft insurance and $4,086,000 in coverage for liability insurance. How many units of each plan should be purchased to meet the needs of the company while minimizing cost? The company should purchase units of plan A and What is the minimum monthly premium for the company? $ units of plan B.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A company is considering two insurance plans with the following types of coverage and premiums:
Fire/Theft
Liability
Plan A Plan B
$20,000 $35,000
$198,000 $126,000
Monthly Premium $75 $57
Premiums are sold in units. For example, one can buy one unit of plan A insurance for $75 per month and receive $20,000 in
Fire/Theft insurance. Two units of plan A insurance cost $150 per month and give $40,000 in Fire/Theft insurance.
The company wants at least $680,000 in coverage for Fire/Theft insurance and $4,086,000 in coverage for liability insurance.
How many units of each plan should be purchased to meet the needs of the company while minimizing cost?
The company should purchase
units of plan A and
What is the minimum monthly premium for the company? $
units of plan B.
Transcribed Image Text:A company is considering two insurance plans with the following types of coverage and premiums: Fire/Theft Liability Plan A Plan B $20,000 $35,000 $198,000 $126,000 Monthly Premium $75 $57 Premiums are sold in units. For example, one can buy one unit of plan A insurance for $75 per month and receive $20,000 in Fire/Theft insurance. Two units of plan A insurance cost $150 per month and give $40,000 in Fire/Theft insurance. The company wants at least $680,000 in coverage for Fire/Theft insurance and $4,086,000 in coverage for liability insurance. How many units of each plan should be purchased to meet the needs of the company while minimizing cost? The company should purchase units of plan A and What is the minimum monthly premium for the company? $ units of plan B.
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