AWhat Is an Insurable Interest? at What Point in a Sales

question 61

Essay

a.What is an insurable interest? At what point in a sales transaction does the buyer get an insurable interest?
b.is the buyer the only one who has an insurable interest in the goods? Is it possible for both the buyer and the seller to simultaneously hold an insurable interest? Explain.

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Definitions:

Target Costing

A pricing strategy in which the selling price of a product is set first, and then the target cost is determined by subtracting a desired profit margin from the selling price.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as net income divided by the cost of the investment.

Selling Price

The price at which a product or service is offered to customers, often determined by costs, market demand, and competition.

Special Equipment

Custom or unique machinery or tools designed for specific production processes or tasks within a manufacturing or production environment.