Mark Purchased a Boat Owners Package Policy

question 22

Multiple Choice

Mark purchased a boat owners package policy.While using his boat,he negligently hit a pier.A person standing on the pier fell and was severely injured.Which of the boat owners package policy coverages will respond to a lawsuit filed as a result of this negligent act?

• A)physical damage coverage
• B)liability coverage
• C)medical expense coverage
• D)uninsured boaters coverage

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Definitions:

Net Present Value

A calculation that compares the value of all cash inflows and outflows of a project or investment using a specified discount rate.

Cash Inflows

Funds entering a business or project, typically received through sales, investments, or financing.

Cash Outflows

Money spent or costs incurred by a business or individual, resulting in a decrease in cash assets.

Internal Rate

Internal rate usually refers to the internal rate of return (IRR), a financial metric used to assess the profitability of investments by calculating the interest rate that makes the net present value (NPV) of all cash flows from a particular project or investment equal to zero.