Calculate the Short-Term Premium and Refund for the Policy Canceled

question 13

Short Answer

Calculate the short-term premium and refund for the policy canceled by the insured. $$\begin{array} { l l l l } \text { Annual } & \text { Canceled } & \text { Short-term } \\\underline{\text { Premium }} &\underline{ \text { After } }& \underline { \text { Premium } } & \underline { \text { Refund } } \\\$ 550 & 4 \text { months } & &\end{array}$$

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Definitions:

Non-normal Cash Flows

Cash flow patterns that do not fit the standard uniform or incrementally changing scenario, often impacting investment analysis.

Initial Costs

The initial expenses incurred during the setup or early stages of a project, including but not limited to setup, installation, and purchase costs.

MIRR

Modified Internal Rate of Return, a measure used to assess the profitability of an investment, accounting for the cost of capital and reinvestment of cash flows.

Terminal Value

The estimated value of a business or project at the end of a forecast period, often used in discounted cash flow analyses.