Find the average amount

Assignment Help Business Management
Reference no: EM132910976

Suppose you own an expensive car and purchase auto insurance. This insurance has a $1000 excess, that is, if you have an accident and the damage is less than $1000, you pay it out of your pocket. However, if the damage is greater than $1000, you pay the excess amount and the insurance pays the rest. In the current year, there is a probability of 0.025 that you will have an accident. It is assumed that the damage amount is normally distributed with a mean of $3000 and a standard deviation of $750.

a) Use Excel to simulate the amount you must pay for damages to your car. Run 500 iterations. Draw suitable graphs, a summary of the data, and comment.

b) Continue the simulation in part (a) by creating a two-way data table giving the amount you pay, for different excess payable ranging from $500 to $2000 in multiples of $500. Now find the average amount you pay, the standard deviation of the amounts you pay, and a 95% confidence interval for the average amount you pay for each excess payable considered. Comment on your findings.

Reference no: EM132910976

Questions Cloud

What amount should be reported as total shareholders equity : Cumulative translation adjustment - credit 1,500,000. What amount should be reported as total shareholders' equity
What is cool caps cost per cap : On February 15, 2021 Cool Caps purchased 400 caps at $18 per cap on credit (2/10, n/30). What is Cool Caps cost per cap
Determine the net present value of the investment : At the end of the machine's ?ve-year useful life, it will have zero scrap value. Determine the net present value of the investment in the machine
Prepare the journal entries relating to pension for the year : Average remaining service life of active employees - 35 years. Prepare the journal entries relating to pension for the year 2020
Find the average amount : Suppose you own an expensive car and purchase auto insurance. This insurance has a $1000 excess, that is, if you have an accident and the damage is less than $1
What is the amount of under or overapplied overhead : Actual direct labor hours for 2017 totaled 215,000 and actual overhead was $702,000. What is the amount of under or overapplied overhead as of the end of 2017
What distinguishes web 2.0 technologies and services : What distinguishes Web 2.0 technologies and services from the prior generation of Internet sites?
Augmented reality handhelds and promotional campaigns : Do an internet search for videos showing examples of augmented reality handhelds and promotional campaigns.
Why is this financial statement so important to businesses : Research topics on the balance sheet. Why is this financial statement so important to businesses? What part of the balance sheet is the most scrutinized

Reviews

Write a Review

Business Management Questions & Answers

  Team commitment and team performance

Explain the relationship between team processes and team commitment and team performance. Why does it matter?

  Drivers of negotiationwhat is the significance of goal

drivers of negotiationwhat is the significance of goal setting before a meeting. what could happen if this preparation

  What tool are use to measure effectiveness of ethics program

Competency 310.2.3- What tools are used to measure the effectiveness of your ethics program? What is the frequency of review? Who will conduct the review? How will improvements be implemented?

  Management approaches of china and another country

Compare and contrast management approaches of China and another country of your choice. Discuss issues that global managers in China and another country might face in the international market and outline methods they can follow to establish a more..

  Individual health and health risks

For this Assignment you will think about your individual health and health risks. What genetic diseases or problems might you face during your lifetime? Predisposition to heart disease, breast cancer, diabetes? You may consider your own health ris..

  Why do some negotiations fail

Describe a specific scenario that needed to be negotiated and analyze why and what factors might be recognized from the presented material. (it can be personal,

  Discuss change management at general motors

Abstract- The main purpose of this article was to elaborate and bring to light the core concept of the organization change, how it works, diverse

  Express how this information system has an impact on firm

Express how this information system has an impact on the organizational structure. For example, has the information system changed explained how it interacts with its customers, suppliers or government agencies.

  Develop these necessary tools to be able to access

What are some ways that these countries can develop these necessary tools to be able to access healthcare?

  Case of missing or inadequate elements

Your judgment, about inadequate keurig k cups. In the case of missing or inadequate elements, recommend changes to the strategy which will correct them. Elucidate the rationale behind evaluations.

  Explain the capital structure of the organization

Explain the capital structure of the organization you have been studying this term. Do they rely more heavily on debt or equity?

  What are the advantages of buying a business

What are the advantages of buying a business rather than starting one from scratch? What are the advantages and disadvantages of owning a franchise?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd