Management has determined that there is one chance in a thousand of a customer being injured or killed. The settlement of resulting lawsuits has an average cost of $750,000. Insurance with a $50,000 deductible is available. It covers the costs of lawsuits unless there is evidence of criminal negligence. Based on cost-benefit analysis, what are the most that the business should pay for the insurance?

$700

Explanation:

In cost benefit insurance , the intervention and its benefit are evaluated to arrive at the best decision for the insured party.

Working

Potential lawsuits - $750,000

Deductible insurance - $50,000

Possibility of injury /death = 1/1000

Maximum payment for insurance - $(750000-50000)/1000

$700

$700

Explanation:

probability of customer being injured = 1 / 1,000 = 0.001

costs without insurance = $750,000

insurance deductible = $50,000

net legal costs with insurance = $750,000 - $50,000 = $700,000

expected legal costs = $700,000 x 0.001 = $700

so the most that the company should be willing to pay for the insurance policy is $700

answer; ///(d); determining who competes most closely   with whom evaluating whether industry driving forces and competitive pressure favor some strategic groups and hurt others, and ascertaining whether the profit potential of different strategic groups varies due to the strengths and weaknesses in each groups respective market positions;

the definition of a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry. a local bakery that employs 10 people is an example of a small business. a manufacturing facility that employees less than 500 people is an example of a small business.