ii] Ari is the owner of "Ari Triple-Five Co.", a well-established construction business in Peterborough, Ontario. The business generates revenue worth 25 million dollars a year. Ari currently employs thirty five workers from the local Peterborough area. The average worker in the area has a $102,500 dollars invested in either chequing or saving accounts. Ari holds 2.5 million dollars in his saving account. He spends the rest of his income lavishing his wife and sending his two teenage children to Upper Canada College. Ari owns some rental properties in Toronto, and invests any rental income into his business. Ari lives in a $1 million dollar house in Oakville, where he keeps his art and antique furniture collection worth $80,000. Atul an analyst with Manulife Insurance Ltd has estimated that there is an annual 2.69% chances of flooding in the local Peterborough area. Ontario has 2.5% chance of fire and Barrie has 3.2% chance of fire. Ontario residents with assets worth $750,000 or above and who are willing to choose deductibles worth $5,760 tend to purchase a home insurance at a premium of $985. The probability of a typical fire in Ontario resulting in damages worth $32,000 is about 5.12%. Farm insurance premium averages $714, and a premium of $510 if 5 the individual chooses deductibles worth $3,100. Flood insurance premium in Ontario averages $425. On average 37% of ontario residents tend to choose deductible options. And for these individuals Manulife tend to revise the probabilies of their farms, houses, and boats burning down to, 1.94%, 1.25%, and 3.2% respectively. And the probability of at least $18,200 worth of damages to 4.05%. And unlike the rest of Ontario, a typical Peterborough resident only insures against flood. Assume that Ontario residents have a risk aversion of 1. All estimated values are annual: Question: Should a typical "Ari Triple-Five" employee accept the insurance offer? And Should the owner of the business accept the offer? And if so, what option(s) should the owner? {HINT: Think reservation price}