4.102 Actuaries A manufacturing representative is considering taking out an insurance policy to cover possible losses incurred by marketing a new product. If the product is a complete failure, the representative feels that a loss of $80,000 would be incurred; if it is only moderately successful, a loss of $25,000 would be incurred. Insurance actuaries have determined from market surveys and other available information that the probabilities that the product will be a failure or only moderately successful are 0.01 and 0.05, respectively. Assuming that the manufacturing representative is will- ing to ignore all other possible losses, what premium should the insurance company charge for a policy in order to break even?