Aqua Sprinkler Systems Experienced Increasing Sales for Several Years

question 14

Multiple Choice

Aqua Sprinkler Systems experienced increasing sales for several years. The firm expanded its product offerings, and now serves both commercial and residential customers. Which of the following situations would be considered an uninsurable risk for Aqua Sprinkler Systems?

• A) a fire that destroys its warehouse
• B) employee sues company due to injury on the job
• C) equipment theft that causes work downtime
• D) drought-resistant grass technology that disrupts sales

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Definitions:

Compounded Monthly

The process of applying interest on both the initial principal and the accumulated interest each month.

Compounded Annually

A method where interest is added to the principal sum at the end of each year, compounding the amount for the next period.

Semi-Annually

Occurring twice a year or every six months, often used in the context of payments or interest calculations.

Ordinary Annuity

A series of equal payments made at regular intervals, with the interest compounding at the end of each period.