XYZ Company Insured Its Building on a Replacement Cost Basis

question 8

Multiple Choice

XYZ Company insured its building on a replacement cost basis for $450,000 under a property insurance policy that included an 80 percent coinsurance clause.The building had a replacement cost of $500,000 when it sustained a $50,000 loss.How much will XYZ Company receive from its insurer,assuming no deductible applies?

• A)$42,500
• B)$45,000
• C)$50,000
• D)$56,250

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Definitions:

Mental Health Problems

refer to a wide range of disorders that affect mood, thinking, and behavior, impacting a person's ability to function in daily life.

Levels of Awareness

Refer to the cognitive capabilities we have to perceive, recognize, and respond to environmental stimuli.

Consciousness

Consciousness is the state of being aware of and able to think about one's environment, thoughts, and experiences.

Freud

Refers to Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, known for his theories on the unconscious mind and the mechanism of repression.