Acme Company has three identical manufacturing plants,one on the Texas Gulf Coast,one in southern Alabama,and one in Florida.Each plant is valued at $50 million.Acme's risk manager is concerned about the damage which could be caused by a single hurricane.The risk manager believes there is an extremely low probability that a single hurricane could destroy two or all three plants because they are located so far apart.What is the probable maximum loss associated with a single hurricane?
A)$0 million
B)$50 million
C)$100 million
D)$150 million

Question

Quizplus · Accepted Answer

The probable maximum loss associated with a single hurricane is $50 million, as it is likely to destroy only one plant due to their geographical separation.

Acme Company Has Three Identical Manufacturing Plants,one on the Texas