The company needs at least $300,000 fire and theft insurance and at least $4,200,000 and liability for the from these plans. How many units should be purchased from H plan to minimize the cost of the premiums? What is the minimum premium?
To determine the number of units to be purchased from the H plan to minimize the cost of the premiums, we would need more information about the premiums associated with each plan. Could you provide the premium rates or any other relevant information regarding the H plan and other available insurance plans?
To determine the number of units and the minimum premium cost for the H plan, we need additional information such as the cost per unit and the premium rates for fire and theft insurance as well as liability.
However, I can explain how to approach this problem.
1. Obtain the cost per unit for the H plan: Contact the insurance company or review your insurance policy to find out the cost per unit for the H plan.
2. Determine the premium rates: Identify the premium rates for fire and theft insurance and liability coverage from the H plan. These rates may vary depending on the coverage amount.
3. Calculate the minimum number of units: Divide the desired coverage amount for fire and theft insurance ($300,000) by the coverage provided by each unit. This will give you the minimum number of units needed for fire and theft insurance.
4. Calculate the minimum number of units for liability coverage: Divide the desired liability coverage amount ($4,200,000) by the coverage provided by each unit. This will give you the minimum number of units needed for liability coverage.
5. Determine the total premium cost: Multiply the number of units required for fire and theft insurance by the cost per unit. Then, multiply the number of units needed for liability coverage by the cost per unit for liability. Add these two amounts together to calculate the total premium cost for the H plan.
6. Compare with other plans: Repeat steps 1-5 for any other insurance plans available to you. Compare the total premium costs obtained to identify which plan minimizes the cost.
By following these steps and obtaining all the necessary information, you should be able to determine the minimum premium cost and the number of units to purchase from the H plan.