Question 1077708
A.The cost of repairs is $8000 per incident, while the probability of an incident is 0.0005. So the expected cost is 8000x0.0005, or $4 per policy. Thus, the net profit from one policy is 28-4, or $24/policy.

B. 300000 policies x $24/policy=$7,200,000 profit annually from lightning insurance. &#9786;&#9786;&#9786;&#9786;