4. Facing Fire Sure to Catch Fire Inc. (SCF) faces an 8% chance of a potential loss of $50 million next year. If SCF implements new safety policies, it can reduce the chance of this loss to 3%, but the new safety policies have an upfront cost of $250,000. Assume that the beta of the loss is 0 and the risk-free rate of interest is 5%. (a) If SCF is uninsured, what is the NPV of implementing the new safety policies? (b) If SCF is fully insured, what is the NPV of implementing the new safety policies? (c) What is the actuarially fair cost of full insurance? (d) Assuming that SCF will purchase insurance, what is the minimum-size deductible that would leave SCF with an incentive to implement the new safety policies?