Which of the following should determine whether or not the firm should purchase insurance from an outside party?

Question

Quizplus · Accepted Answer

The cost of the policy and the expected losses should both be taken into consideration when deciding whether or not to purchase insurance from an outside party. Simply looking at the frequency or maximum size of incidents may not provide a full picture of the potential risk and cost to the firm. The firm's normal cash reserves may also be a factor, but should not be the sole determinant.

Which of the Following Should Determine Whether or Not the Firm