Author Question: Jenkins Company purchased a commercial umbrella policy with a 10 million limit and a 100,000 ... (Read 68 times)

newyorker26 · **on:** Jul 11, 2018

Jenkins Company purchased a commercial umbrella policy with a 10 million limit and a 100,000 self-insured retention.

The insurer required Jenkins Company to carry a 1 million per-occurrence limit on its general liability policy and a 1 million per-occurrence limit on its business auto policy. Jenkins purchased these required limits. A Jenkins driver was negligent while operating a company vehicle and killed another motorist. The court ruled that Jenkins must pay 5 million. How much of this amount will be paid by the umbrella policy?
A) 1.0 million
B) 3.9 million
C) 4.0 million
D) 5.0 million

Question 2

The ________ is the maximum a firm can grow with internally generated equity and new borrowing sufficient to maintain the current long-term-debt to equity ratio.

A) internal growth rate
B) sustainable growth rate
C) return on equity
D) return on assets