Which of the Following Statements Is True About an Insurable

question 52

Multiple Choice

Which of the following statements is true about an insurable interest?

• A) An insurable interest is the right to insure goods in one's possession.
• B) It is not relevant when an insurable interest is created.
• C) Only the buyer can insure itself for potential damage to goods.
• D) Only the seller can insure itself for potential damage to goods.
• E) Both the buyer and seller can insure themselves for potential damage to goods.

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Definitions:

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no profit or loss.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and included in the product's cost calculation.

Break-Even Point

The level of production or sales volume at which total revenues equal total costs, resulting in zero profit or loss.

Contribution Margin Ratio

The ratio of contribution margin to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and generate profit.