A lawnmower manufacturer has the following loss distribution and its annual products liability costs. Assume all loading and other expenses are all equal to zero. What is the premium for a policy that has a no deductibles but has $700,000 policy limit? P(L) L 0.984 0.010 $50,000 0.004 $250,000 0.002 $750,000 $0 $3,100.00 $2,400.00 O $1,900.00 O $2,900.00 O $1,300.00

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A lawnmower manufacturer has the following loss distribution and
its annual products liability costs. Assume all loading and other
expenses are all equal to zero. What is the premium for a policy
that has a no deductibles but has $700,000 policy limit?
P(L) L
0.984
0.010 $50,000
0.004 $250,000
0.002 $750,000
O $3,100.00
O $2,400.00
O $1,900.00
O $2,900.00
O $1,300.00
$0
Transcribed Image Text:A lawnmower manufacturer has the following loss distribution and its annual products liability costs. Assume all loading and other expenses are all equal to zero. What is the premium for a policy that has a no deductibles but has $700,000 policy limit? P(L) L 0.984 0.010 $50,000 0.004 $250,000 0.002 $750,000 O $3,100.00 O $2,400.00 O $1,900.00 O $2,900.00 O $1,300.00 $0
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