Compare the additional revenues needed

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Question - Your friend John works for an insurance company. John holds a business degree and has been involved in the insurance business for many years. John shares some recent company gossip with you. He has heard that the Internal auditors estimate the company has lost shs 250 million because of fraud in the last few years. Because you are an Msc Finance student, John asks how this will affect the company's profitability. John doesn't have access to the company's financial information.

Required -

i) Compare the additional revenues needed to make up for the lost money, assuming that the company has profit margin of 5, 10 and 15%.

ii) Give example of three types of fraud that could affect the Insurance Company.

Reference no: EM133037878

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