Reference no: EM133030269

Question - Indicate whether the statement is true or false. (Topics: Insurance Contract, Build Operate Transfer, PFRS 15)

1. The occurrence of the event must be certain at the inception of the insurance contract.

2. The risk of possible future change in a specified interest rate is an insurance risk.

3. There can be no double compensation. The insured can claim full compensation from only one of the insurers or from all the insurers.

4. An insurance contract is issued by the reinsurer to compensate another insurer for losses on one or more contracts it issued.

A flood damaged the merchandise inventory of Suzy Company on July 25, 2020. You have discovered the following information from the records salvaged from the flood: Inventory, January 1, 2020 $1,960,000, Sales, January 1 - July 25, 2020 (including goods sold but not delivered to customers, $76,000) $19,530,000, Merchandise purchases including those still in transit, shipped FOB shipping point, $138,000) $10,470,000, Mark-up on goods sold 40% of cost. The merchandise saved from the flood has an estimated value of $163,000. How much is the estimated value of inventory damaged by the flood?