IMA Manufacturing has just purchased a difference in conditions (DIC) policy with a $5 million general limit with a $50,000 deductible. The company's earthquake coverage has a $2 million limit with a $100,000 deductible and a 10 percent participation by the insured in all earthquake losses over the $100,000. If IMA suffers a $1 million earthquake loss, which one of the following is true of the coverage provided? $0 is provided by earthquake coverage; $950,000 is provided by DIC coverage $50,000 is provided by earthquake coverage; $950,000 is provided by DIC coverage $810,000 is provided by earthquake coverage; $0 is provided by DIC coverage $810,000 is provided by earthquake coverage; $190,000 is provided by DIC coverage
IMA Manufacturing has just purchased a difference in conditions (DIC) policy with a $5 million general limit with a $50,000 deductible. The company's earthquake coverage has a $2 million limit with a $100,000 deductible and a 10 percent participation by the insured in all earthquake losses over the $100,000. If IMA suffers a $1 million earthquake loss, which one of the following is true of the coverage provided? $0 is provided by earthquake coverage; $950,000 is provided by DIC coverage $50,000 is provided by earthquake coverage; $950,000 is provided by DIC coverage $810,000 is provided by earthquake coverage; $0 is provided by DIC coverage $810,000 is provided by earthquake coverage; $190,000 is provided by DIC coverage
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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IMA Manufacturing has just purchased a difference in conditions (DIC) policy with a $5 million general limit with a $50,000 deductible. The company's earthquake coverage has a $2 million limit with a $100,000 deductible and a 10 percent participation by the insured in all earthquake losses over the $100,000. If IMA suffers a $1 million earthquake loss, which one of the following is true of the coverage provided?$0 is provided by earthquake coverage; $950,000 is provided by DIC coverage$50,000 is provided by earthquake coverage; $950,000 is provided by DIC coverage$810,000 is provided by earthquake coverage; $0 is provided by DIC coverage$810,000 is provided by earthquake coverage; $190,000 is provided by DIC coverage
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