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:

Job Transfer

Refers to the process of moving an employee from one job or department within the company to another.

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The process of ending employment or agreement within an organization, either voluntarily or involuntarily.

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Occurs when the reasons for a conflict are eliminated.

Ends

The term refers to the goals or objectives that individuals or organizations aim to achieve.