1. At the beginning of 2009, Gabriela had to decide between the two car insurance plans shown...
Question:
1.At the beginning of 2009, Gabriela had to decide between the two car insurance plans shown below, and she chose plan B.
Plan A:
Comprehensive Deductible: $435
Collision Deductible: $480
Premium of $695 for 6 months
Plan B:
Comprehensive Deductible: $490
Collision Deductible: $555
Premium of $220 for 2 months
Help Jebecca determine if she chose the right plan by answering the following questions.
Part I: In February 2009, Jebecca caused $600 worth of damage to her vehicle when she inadvertently backed into someone's fence. How much would Jebecca have had to pay under plan A? How much did she pay under plan B?
Part II: A few months later, Jebecca was involved in an accident with another driver, and it was Jebecca's fault. The other driver had to go to a chiropractor to treat a stiff neck, and the bill was $710. How much would Jebecca have had to pay towards the driver's medical costs under plan A? How much did she pay under plan B?
Part III: How much would Jebecca have had to pay for a year's worth of premiums under plan A? How much did she pay under plan B?
Part IV: Assuming that Jebecca was not involved in any mishaps in 2009 other than those described in Parts I and II, how much in total would she have paid under plan A for the year?
Part V: Assuming that Jebecca was not involved in any accidents in 2009 other than those described in Parts I and II, how much in total did she pay under plan B for the year?
Part VI: If all Jebecca cares about is getting the lowest price, did she choose the right plan for 2009?
Cornerstones of Cost Management
ISBN: 978-1111824402
2nd edition
Authors: Don R. Hansen, Maryanne M. Mowen