State-mandated minimum liability

Assignment Help Finance Basics
Reference no: EM133110725

Janet, a friend of the Ken and Beverly Austin, lives in Nebraska, where she carries the state-mandated minimum liability insurance for her auto of 10/25/20 through her personal automobile policy (PAP). She is driving through Texas and has an auto accident. Texas requires minimum liability insurance of 25/50/20. Janet injures Sarah in an amount that equals $30,000 and Sarah's auto in the amount of $15,000. How much will Sarah collect from Janet's PAP?

Answer: For the injury of Sarah Janet's PAP will pay $25,000 and for the auto's damage is $20,000

Step-by-step explanation

  1. 25/50/20 means $25,000 for the injury of one person and the remaining will be shouldered by Janet and it goes as well for the damage.

This was a question answered by another tutor. I don't quite understand the explanation, To my understanding Janet only owns a policy that's 10/25/20, so I thought that's why Janet's auto insurance would pay up to $25,000. I thought even though Texas's state minimum liability policy requires 25/50/20 that's not what she has. If anyone could clarify.

Reference no: EM133110725

Questions Cloud

Determine a firm cost of equity capital : How can you determine a firm's cost of equity capital? Explain with an example. What is the relationship between the required return on an investment and the co
Corporate entrepreneurship is oxymoron : Discuss whether the term "corporate entrepreneurship" is an oxymoron. Can corporations-especially large ones-be innovative?
What percentage of the payment represents interest : What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations
Implementation of a central counter party : The implementation of a Central Counter party (CCP) is an important measure to increase the efficiency of the capital markets. Please (i) explain the basic conc
State-mandated minimum liability : Janet, a friend of the Ken and Beverly Austin, lives in Nebraska, where she carries the state-mandated minimum liability insurance for her auto of 10/25/20 thro
Integration of biblical principles and perspectives : Propose how externalities relate to ethical leadership of firms in this industry. Integration of biblical principles and perspectives in Economic Analysis
What different financial reports are prepared by a business : Answer the following questions correctly - What different financial reports are prepared by a business? Give a concise description for each
Improvement to existing product or service : An improvement to an existing product or service you have envisioned in the role of a product specialist at a company.
Explain how a company could avoid a backlog of orders : Explain how a company could: (a) avoid a backlog of orders when sales exceed expectations; (b) avoid product defects on new products; (c) offer more credit to i

Reviews

Write a Review

Finance Basics Questions & Answers

  Appropriate model for the number of offices

She is visiting 20 offices this week. Assume the binomial is an appropriate model for the number of offices that make the purchase. What is the probability that exactly 4 of them will make a purchase? (give your answer to 4 decimal places as a nu..

  Describe the delta-hedging procedure

Suppose the stock moves up, then down and then up again. Describe the delta-hedging procedure you undertake, calculate cash balances at every node.

  Compute the value of millennium chemist bond

Millennium Chemist Ltd. issued a bond that has 14% coupon rate, paid semi-annually. The bond has a face value of $1,000 and will mature 10 years from now.

  Evolution of plants from bryophytes to angiosperms

What were the major changes observed over time? Consider the dominant life cycle (gametophyte or sporophyte), size and morphology of the plants, conducting meth

  What is the nominal and effective cost of trade credit

Assuming 365 days, what is the nominal and effective cost of trade credit under the credit terms of 4/15, net 30? Round to two decimal places.

  Find forward contract to hedge against changes

A trader wishes to enter a forward contract to hedge against changes in the price of corn. What should be the no-arbitrage price of this contract?

  Nature of strategic planning

In a 250-300 word post, answer the following questions: What is strategic planning? How does it differ from other forms of planning? Why is the strategic planning process important to entrepreneurs in starting a new venture?

  Otobai is considering still another production method for

otobai is considering still another production method for its electric scooter. it would require an investment of 15.45

  Find the risk-free rate for a firm with a required

1. Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14%.

  Aggregate demand-aggregate supply model

Using the aggregate demand-aggregate supply model, explain and demonstrate graphically the short-run and long-run effects of an increase in the money supply.

  Nominal annual interest rate

Victoria and David have a 30-year, $75,000 mortgage with an 8% nominal annual interest rate. All payments are due at the end of the month. If Victoria and David

  What is the cash conversion cycle

Define (1) what is the cash conversion cycle and (2) how the cash conversion cycle is calculated. Also define how it is calculated by component. Identify ways by component that an organization can improve its cash conversion cycle.

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