Question
1. A dog being trained at Good-As-Gold (GAG) Canine Obedience School repeatedly bit a customer who was dropping off her golden retriever for training. The
1. A dog being trained at Good-As-Gold (GAG) Canine Obedience School repeatedly bit a customer who was dropping off her golden retriever for training. The customer was bit on her face, arms, and legs. She filed a lawsuit against GAG. GAGs liability insurer has offered three settlement options (structured settlements) to the claimant. Here are the settlement options:
Option #1: Five payments of $42,500, with the payments one year, three years, five years, seven years, and nine years from today.
Option #2: A payment of $75,000 today and $75,000 five years from today.
Option #3: Four annual payments of $40,000 with the first payment one year from today.
Assuming a 4% discount rate, which settlement option is best from the perspective of GAG and its insurer? Justify your answer with the appropriate calculations. (5.5 points)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started