​Scatterbrain Samantha Often Forgets to Lock Her House

question 43

Multiple Choice

​Scatterbrain Samantha often forgets to lock her house.This has caused the probability of a burglary to be 30%.If her house gets broken into,she faces a property loss of $10,000,otherwise she gets to keep her $100,000.If Samantha is offered full coverage for her house at $1,500,what is her expected wealth with the insurance policy?

• A)​$80,000
• B)$87,000
• C)$97,000
• D)​$98,500

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Definitions:

Statement of Cash Flows

An accounting statement detailing collective cash receipts from operational businesses and external investments, plus cash expenses for business and investment activities over a designated period.

Operating Activities

Operating Activities involve the core business processes and transactions related to producing and delivering goods and services, typically reflected in the cash flow statement.

Indirect Method

A method used in cash flow statements to adjust net income for non-cash transactions and changes in working capital to determine the net cash flow from operating activities.

Statement of Cash Flows

A financial statement that provides an aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.