Fernando's Choppers Owns a Building Valued at $1,091,000, but Has

question 58

Short Answer

Fernando's Choppers owns a building valued at $1,091,000, but has decided to insure it for only $587,000. Their insurance policy stipulates coinsurance of 70%. If a fire were to cause $516,000 in damage, how much would the insurance company pay on the claim?

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Definitions:

Investment

The allocation of resources, such as capital or time, in expectation of generating future returns.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, taking into account its risk level.

Target Cost

The desired cost of a product as determined by its expected selling price minus desired profit, aimed to ensure competitiveness and profitability.

Preventive Maintenance

Maintenance activities carried out regularly on equipment to prevent unexpected failures.