A Navigation Error Caused a Cargo Ship to Run Aground

question 17

Multiple Choice

A navigation error caused a cargo ship to run aground on a reef.The ship,valued at $1.5 million,was carrying $1.5 million in grain and $1.5 in electronic devices.The ship sustained $150,000 in physical damage.If this loss is a "particular average" loss,how will the loss be settled?

• A)The owners of each of the three interests are responsible for $50,000.
• B)The owner of the ship is responsible for the entire $150,000 loss.
• C)The two cargo owners are each responsible for $75,000 of the loss.
• D)The owner of the ship is responsible for the first $100,000 of the loss,and the two cargo owners are each responsible for $25,000 of the loss.

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Definitions:

Base

In finance, it typically refers to the basic rate or the initial point of reference from which calculations are made or adjusted.

Decimal Places

The number of digits to the right of the decimal point in a number.

Base Value

A reference or initial value used for comparison or calculation purposes in finance and economics.

Rate of Decrease

A measure of how quickly a quantity is diminishing over time, often expressed as a percentage or a ratio.