Answer:
This is true
Explanation:
With the recent development in modern communication technologies, communication with customers is is now very easy and yet very sophisticated. The advent of modern day communication in business like the internet and online shopping had now made it possible for a customer to communicate their wants easily to the seller and also make purchase, track their purchase and easily access more information about their seller and their purchase all from the comfort of their homes.
You want to buy a new ski boat 2 years from now, and you plan to save $6,400 per year, beginning one year from today. You will deposit your savings in an account that pays 6.2% interest. How much will you have just after you make the 2nd deposit, 2 years from now?
Answer:
Total Amount after 2 years = $13196.8
Explanation:
Data Given:
Amount of savings per year = $6400
Interest rate = 6.2%
Find Total Amount in account after 2 year:
Solution:
Lets consider it step by step.
Amount of money deposited in account after 1 year = $6400
After 2 years, we earn 6.2% interest on $6400,which is:
[tex]\frac{6.2}{100}\cdot6400= 396.8[/tex]
So, after 2 years, BEFORE the 2nd deposit, we have $6400 + $396.8 = $6796.8 in the account.
AFTER 2nd deposit of $6400, total amount we have in account is:
Total Amount = $6796.8 + $6400 = $13196.8
Which of the following is NOT a type of bank or banking system? Northern Credit Union Central Commercial
Answer:
Credit union
Explanation:
A credit union is technically not considered a bank, unlike the other answer choices, because credit unions are not-for-profit. Banks, of course, take te money in checking accounts and use it for their own ends, but credit unions are just groups that provide mutual benefit to those who use them.
“Creditors do not actually have to worry about their dues in case the business fails.” In which
form of business is this possible? Which special feature is highlighted in this statement ?
Answer:
Sole proprietorship
The sole proprietor(not creditors but creditor) bears all losses
Explanation:
Sole proprietorship is a form of business in which there is no legal difference between the owner and the business entity as both are one and the same. The term 'sole' connotes 'only' while 'proprietorship' connotes 'owner(ship)'; it is also referred to as individual entrepreneurship. This is because only the owner of the business (the proprietor) bears all the risks (losses, debts, legal actions etc) and benefits (profits, dividends etc) of the business venture. He owns all the assets of the business venture, debts as well as the legal actions (whether positive or negative); when business is faring well, he enjoys a handsome profit and when business is struggling, he also bears the brunt of it.
The special feature highlighted in the statement above is the reality that the "creditors" refers simply and only to the proprietor (the owner of the business); in which case, if the business fails, the proprietor does not have to bother about the backlash from creditors' pressures, legal actions etc. He is the sole bearer of the losses of the business venture.
Kyei weighed half the total weight of his two brothers. his two brothers be weighed 44 1/2kg and 32 1/2kg.what was kyei's weight
Answer:
Kyei's weight = 38.5 kg
Explanation:
Given:
Kyei's brother's weight = 44.55 kg and 32.5 kg
Find:
Kyei's weight.
Computation:
⇒ Kyei's weight = Sum of Kyei's brother's weight / 2
⇒ Kyei's weight = [44.5 + 32.5] / 2
⇒ Kyei's weight = [77] / 2
⇒ Kyei's weight = 38.5 kg
A down payment is usually what percentage of the asking price of a home?
05 percent
5-20 percent
20-50 percent
50-75 percent
A down payment is usually what percentage of the asking price of a home is 5-20 percent. People take out a loan to cover the remainder of the purchase price of the Home.
What is down payment?
A down payment is a sum of money given by a buyer at the beginning of the buying process for a costly item or service.
Because the down payment is only a portion of the total purchase price, the buyer will almost certainly need to borrow the balance.
Thus, option B is correct.
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Answer: B or 5–20 percent
A down payment is usually what percentage of the asking price of a home?
0–5 percent
√5–20 percent
20–50 percent
50–75 percent
Explanation:
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $120,000 to $150,000 and would decrease the current variable costs of $70 by $10 per unit. The selling price of $100 is not expected to change. Forrester's current break-even sales are $400,000 and current break-even units are 4,000. If Forrester purchases this new equipment, the revised break-even point in dollars would be: $300,000. $400,000. $325,000. $500,000. $375,000.
Answer: $375,000
Explanation:
Given the following :
Selling price = $100
New variable cost per unit =$(70 - 10) = $60
New fixed cost = $150,000
Break-even point in dollars:
Fixed costs/Contribution margin ratio
contribution Margin Ratio
[(selling price per unit - total variable cost per unit) /selling price per unit]
= [($100 - $60) / $100]
$40 / $100 = 0.4 = 40%
Break-even point in dollars:
$150,000 / 0.4 = $375,000
i will give brainliest if correct
Which two sentences describe the characteristics of a corporation?
The company is treated as a separate tax entity by law.
The owners have to accept partial liability for debts.
It is possible to raise large amounts of capital by selling company stock.
The owners are known as corporators.
Answer:
I believe that it is A and C
Explanation:
Answer:
I believe that it is A and C
Explanation: on plato
A checking account has cash that you can use at your disposal. So, when the pharmacist asked “Cash or Credit?”, why did you say “debit” instead of either of the other two options?
Answer:
Credit:Credit is usually less used than the cash and debit. The reason is that credits can help you build high balances, as it help you spend money which you currently don't have, which you may or may not be able to pay by the end of the month. If you are not able to pay by the end of the month, interest charges will be applied, and your financial hardships will easily grow.
If you have a checking account with enough cash, you simplify don't need to go for credit to avoid such a situation.
Cash:The use of cash is reducing day by day. The main reason is that you have to decide before leaving the house how much cash you should carry. If your wallet gets lost, money is gone. If you are at a shop and your money falls short, then you'll have to go to an ATM to withdraw some more. This may seem a lot of hassle for some, and to avoid that people prefer to go for Debit.
Debit
Debit is considered the most friendliest way of transaction.
You don't have to worry all about the interest rates and the bills you get at the end of the month by using Credit, because you are using your own money from your current account to pay for purchases.
You also don't have to worry about carrying cash with you all the time. If your debit card gets misplaced, just report it and block it. You won't suffer any financial damage
what is organic manure? how can it help to farmer. Ans from class 8
Answer:
manure that is from decayed plaint and animal matter, helps crops consume more nutrients.
Explanation:
organic manure is derived from decayed plant/animal matter. Inorganic manure, exclusively now referred to as fertilizers, are chemicals produced by controlled chemical processes. manure increases organic carbon in soil and thus leads to higher organic matter in soil. organic matter is the soil fertilities assessment index. If there is enough organic matter in the soil, there would be more microbe development, so crops will consume more nutrients from the soil.
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What companies are affected badly by corona?
Answer:
mostly food companies
Explanation:
food companies are basically struggling alot!
Here is some basic data for Delta Manufacturing: Cost of materials purchases on account $ 77,000 Cost of materials requisitioned (includes $2,000 of indirect) 45,000 Direct labor costs incurred 80,000 Manufacturing overhead costs incurred, including indirect materials 98,000 Cost of goods completed 276,600 Cost of goods sold 149,000 Beginning raw materials inventory 19,000 Beginning work in process inventory 35,000 Beginning finished goods inventory 25,000 Predetermined manufacturing overhead rate (as % of direct labor cost) 120% The journal entry to record actual manufacturing overhead costs includes a
Answer:
Overheads $498,000 (debit)
Cash $498,000 (credit)
Explanation:
First calculate the Amount of Actual overhead incurred (overheads are indirect manufacturing costs)
Manufacturing overheads incurred = $498,000
Journal Entry
Overheads $498,000 (debit)
Cash $498,000 (credit)
This journal is different from that of recording applied overheads which is shown as follows :
Work - In - Process $ 96,000 (debit)
Overheads $ 96,000 (credit)
Overheads amount = 80,000 × 120% = $ 96,000
Calculate Social Security taxes, Medicare taxes, and FIT for Jordon Barrett. He earns a monthly salary of $11,300. He is single and claims 1 deduction. Before this payroll, Barrett’s cumulative earnings were $128,070. (Social Security maximum is 6.2% on $128,400 and Medicare is 1.45%.) Calculate FIT by the percentage method. (Use Table 9.1 and Table 9.2) (Round your answers to 2 decimal
Answer:
1) social security taxes = (accumulated earnings - social security maximum) x 6.2% = ($139,370 - $128,070) x 6.2% = $700.60
2) medicare taxes = monthly earnings x 1.45% = $11,300 x 1.45% = $163.85
3) in order to calculate federal income taxes, I used the 2019 tables and allowance:
2019 allowance = $350 per person
monthly paycheck between $7,333 - $13,710
must withhold $1,198.46 plus 24% in excess of $7,333
federal income taxes under percentage method = $11,300 - $350 (1 monthly allowance 2019) = $10,950
$1,198.46 + [($10,950 - $7,333) x 24%] = $1,198.46 + $868.08 = $2,066.54
For 2020, there are no more personal allowances.
Devon forgets to pay her credit card bill for three months. What is the impact of her forgetfulness? (choose ALL correct answers) *A late payment fee will be charged to her account *A balance transfer fee will be charged to her account *Her A.P.R. (interest rate) will rise to 30.24% until she pays back the amount she owes. *Her A.P.R. (interest rate) will rise to 30.24% and stay there until she makes six consecutive minimum payments
Answer:
A late payment fee will be charged to her account.
Explanation:
As mandated by law one is expected to pay outstanding credit card balances within a 21 days period after which you may face additional charges and restrictions.
Since in Devon's case she forgot her credit card bill for up to three months her account would have already been charged a late payment fee from the very first month and this fee will continue to increase in line with the Credit CARD Act of 2009.
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 32,000 Indirect materials included in manufacturing overhead $ 4,680 Direct labor $ 59,300 Manufacturing overhead applied to work in process $ 87,100 Underapplied overhead $ 4,100 Inventories Beginning Ending Raw materials $ 11,200 $ 20,000 Work in process $ 56,000 $ 68,500 Finished goods $ 34,900 $ 43,700 Required: 1. Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.
Answer and Explanation:
1. The Preparation of schedule of cost of goods manufactured for the month is prepared below:-
Primare Corporation
Schedule of Cost of Goods manufactured
Particulars Amount
Direct Materials:
Beginning Raw Material $11,200
Add: Raw Material purchases
during the month $32,000
Total Raw Material available $43,200
Less: Ending Raw material $20,000
Raw Material used in production $23,200
Less: Indirect Material included in
manufacturing Overhead $4,680 $18,520
Add: Direct labor $59,300
Add: Manufacturing overhead
applied to work in process $87,100
Total Manufacturing Costs $164,920
Add: Beginning Work In Process $56,000
Less: Ending Work in Process $68,500
Cost of Goods manufactured $152,420
2. The Preparation of schedule of cost of goods sold for the month is prepared below:-
Primare Corporation
Schedule of Cost of Goods Sold
Particulars Amount
Beginning finished Goods Inventory $34,900
Add: Cost of Goods Manufactured $152,420
Goods available for sale $187,320
Less: Finished Goods Inventory, Ending $43,700
Unadjusted cost of goods sold $143,620
Add: Under-applied Overhead $4,100
Cost of Goods Sold adjusted $147,720
(Under-applied overhead refers that there was less overhead applied that is Actual overheads are more than the overhead applied, thus adding to the cost of the goods sold)
Comet Company is owned equally by Pat and his sister Pam, each of whom hold 100 shares in the company. Comet redeems 50 of Pam's shares on December 31, 20X3, for $1,000 per share in a transaction that Pam treats as an exchange for tax purposes. Comet has total E&P of $250,000 on December 31, 20X3. What are the tax consequences to Comet because of the stock redemption?
Answer:
Comet's E&P will decrease by $50,000 due to the exchange.
Explanation:
50 of Pam's shares are worth 50 x $1,000 = $50,000, since the corporation is redeeming them, it will do so by decreasing its earnings and profits (retained earnings account).
Generally when larger corporations buy back stocks (AKA treasury stocks), they will credit cash and debit treasury stocks, but since Pam's stocks are being retired, they are not going to be held as treasury stocks, therefore E&P must decrease.
1 point
10. In reviewing your account statement, you see a Balance Transfer Fee.
Based on the information you see in the statement, what would be the fee
if you transferred $3,000 from another credit card? *
Answer:
Find attached statement and the question which question number 10.
The correct option is C,$90
Explanation:
In the statement you would notice that the balance transfer from another credit card was $785,upon which balance transfer levy of $23.55 was charged(Section 7)
Intuitively, the percentage of balance transfer charge is $23.55 divided by the amount of balance transfer i.e $785
balance transfer charge(%)=$23.55/$785=3%
However, if the balance transfer were $3000,the charge is 3% of $3000 i.e $90 ($3000*3%).
The correct option then is C,$90
"Creditors do not actually have to worry about their dues in case the business fails." In which form of business is this possible? Which special feature is highlighted in this statement ?
Answer:
sole proprietorship.
Explanation:
An exclusive property can be defined as a business structure that is managed and owned by a single person, so there is no legal distinction between the owner and his company. This is a type of simple business structure, and is generally used by people who are starting some kind of enterprise.
Therefore, this is the most appropriate business form for the statement of the issue, since in this structure there is only a single owner in the company, which guarantees its sole responsibility for all profits, debts and losses inherent to the business.
General Mills began losing market share for Go-gurt when its biggest competitor began to focus on kids' yogurt. Which step of the market research process does this statement best correlate with?
a. Analayzing data
b. Data collection
c. Choosing the data collection method
d. Analyze and interpret the data
Answer:
b. Data collection
Explanation:
General Mills is only at the first stages of the market research process, which include: diagnosis of the problem, definition of the problem, and data collection.
General Mills has found that it's lost market share to its biggest competitor because the competitor decided to focus on a particular type of yogurt. This is Data collection.
A company in Maine sends lobsters to France What is Maine doing? Select three options
Answer:
Following are the answer to this question:
Explanation:
Some information is missing in the question. So, the correct choices can be described as follows:
i) practicing international trade
ii) exporting products
iii) participating in globalization
Maine has been globally traded because its, company transfers it's own goods at international frontiers when a client gives lobster with France in Maine. It exports products as its goods are manufactured in one nation, in this scenario the USA, is one other country, France in this case.Finally, it participates in the process of globalization because the company operates internationally by selling its products.Answer:
B. practicing international trade
C. exporting products
D. participating in globalization
“A” represents the new quantity supplied, while “B” represents the new quantity demanded. What is the result of these changes?
equilibrium
supply shift
excess demand
excess supply
Based on this graph, what should happen to prices?
They should fall.
They should rise.
They should stay the same.
**PLEASE INCLUDE AN EXPLANATION!!
The result of the changes in the new quantity demanded and supplied would be called as:
d). Excess supply
On the basis of the graph, the price of the good would:
a). They should fall.
Demand and Supply
As represented by A and B, the increase in the price of the product would cause a fall in the demand of the product's quantity. As per the law of supply, the producers are willing to sell more goods at a higher price. While the law of supply states that the consumers demand the lower amount and therefore, the supply becomes excess, leading the price to fall.Thus, options d and a would be the correct answer.
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Answer:
first one: excess supply
second one: they should
Explanation:
How much would $20,000 due in 50 years be worth today if the discount rate were 7.5%?a. $438.03b. $461.08c. $485.35d. $510.89e. $537.78
Answer:
The present value is $537.78
Explanation:
Given
[tex]Future\ Value\ (FV) = \$20,000\\Time (T) = 50\ Years\\Discount\ Rate\ (R)= 7.5\%[/tex]
Required
The Present Value(I)
To calculate the present value, we simply apply the formula for future value;
[tex]FV = I *(1 + R)^T[/tex]
Substitute 20,000 for FV; 50 for T and 7.5% for R;
This gives
[tex]20,000 = I *(1 + 7.5\%)^{50}[/tex]
Convert percent to decimal
[tex]20,000 = I *(1 + 0.075)^{50}[/tex]
[tex]20,000 = I *(1.075)^{50}[/tex]
[tex]20,000 = I *37.19[/tex]
Divide both sides by 37.19
[tex]\frac{20,000}{37.19} = \frac{I *37.19}{37.19}[/tex]
[tex]\frac{20,000}{37.19} = I[/tex]
[tex]537.778 = I[/tex]
[tex]I = 547.78\ (Approximated)[/tex]
Hence, the present value is $537.78
When Coca-Cola purchased first a part and then all of Honest Tea, what would have been appropriate ways to help this change be successful? Select all that apply. A: To the extent that Honest Tea began using Coca-Cola's payroll and expense reimbursement systems, train employees on these systems. B: Conduct team-building exercises to help groups of employees from Coca-Cola and Honest Tea communicate effectively and address conflict. C: Survey Honest Tea employees to identify sources of anxiety and conflict related to the acquisition. D: Use a change agent to freeze Honest Tea's very successful culture before Coca-Cola could have any impact.
Answer:
The most applicable choices in the order of importance are
C, B then A. Of course, they have to be applied at various stages of the acquisition.
Explanation:
C should have occurred (if possible) before the acquisition. Usually, when there is a major acquisition such as the one described above, it comes with good and bad tidings.
In some cases, especially one involving a large and efficient system like Coca-Cola, many positions become redundant.
In other cases, people are worried if their compensation will be affected. There are usually questions such as:
Will my compensation be reviewed upwards or, downwards?Will my insurance or 401K be affected adversely? e.t.c.Thus, executing a survey of Honest Teas' employees to identify such sources of anxiety and conflict related to the acquisition with the goal to address them constructively, will help the change to be successful.
Option B is one strategy that ought to have been executed upon the conclusion and official announcement of the acquisition exercise. This is the most crucial and maybe the most important part of the acquisition/takeover process.
This is true especially if there is going to be changes in management, communication styles, and the culture. Other benefits of team building excercises are, it increases and or improves:
ProductivityMoraleStaff Motivation andCommunication all of which are critical to the success of any organisation.Option C: On the balance of probability, it is expected that when a bigger company like Coca-Cola acquires a smaller one, the process comes with a lot of benefits. One of such benefits is the payroll upgrade.
After all is said and done, it will serve to boost the motivation and morale of the staff if Honest Tea began to use Coca-Cola's payroll which is likely to be more robust.
Because Cocal-cola is an older, more experience and more global company, it is more likely to have more efficient reimbursement systems. If these are inculcated into the Honest Tea process, with adequate training on how to use it, it will also serve to ensure homogeneity of systems and operations which is critical to the success of an acquisition.
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The management of company B believes that money is the only way to motivate employees. Do u agree.justify ur answer?pls
Answer:
There are actually two answers to this question its a Yes and a No
Explanation:
The reason is some employees are realistic enough to be encourage by words WHILE some others believed to be encouraged by money but from my POV I think no
Swain company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. the company's beginning balance in retained earnings is $65,000. it sells one product for $170 per unit and it generated total sales during the period of $603,500 while incurring selling and administrative expenses of $54,500. swain company does not have any variable manufacturing overhead costs and its standard cost card for its only product is as follows:
Answer:
Budgeted COGS = $134 x 3,550 units = $479,250
Actual COGS = $482,151.42, so the total variance was $2,901.42 U
Swain Company
Income statement
Total revenue $603,500
COGS: ($482,151.42)
Direct materials $217,925.67Direct labor $14,300.75Fixed overhead $249,925Gross profit $121,348.58
S&A expenses ($54,500)
Net profit $66,848.58
Retained earnings = $65,000 + $66,848.58 = $131,848.58
Explanation:
retained earnings $65,000
total sales $603,500
number of units sold = $603,500 / $170 per unit = 3,550 units
selling and administrative expenses $54,500
materials quantity variance = (actual quantity - standard quantity) x standard price = $9,250 favorable. This means that the company used fewer materials than budgeted: -$9,250 = (actual quantity - 24,850) x $9
actual quantity used = (-$9,250 / $9) + 24,850 pounds = 23,822.22 pounds less
materials price variance = (actual cost - standard cost) x units purchased = $3,525 U. This means that the company paid $3,525 more for materials than it had estimated: $3,525 = (actual cost - $9) x 23,822.22 pounds
actual cost = ($3,525 / 23,822.22 pounds) + $9 = $9.148 per pound
*the only way 2 labor hurs x standard cost = $1, is that standard cost = $0.50
labor efficiency variance = (actual hours - standard hours) x standard rate = $6,725 = (actual hours - 7,100) x $0.50:
actual hours = ($6,725 / $0.50) + 7,100 = 20,550 hours
labor rate variance = actual hours x (actual rate - standard rate) = $4,025 = 7,660.42 hours x (actual rate - $12):
actual rate = ($4,025 / 20,550 hours) + $0.50 = $0.6959
fixed overhead budget variance = actual fixed overhead - budgeted overhead = $1,425 U = actual fixed overhead - $248,500:
actual fixed overhead = $248,500 + $1,425 = $249,925
actual fixed overhead per unit = $249,925 / 3,550 = $70.4014
fixed overhead volume variance = (actual hours - standard hours) x actual fixed overhead per unit = -$6,000 F = (actual hours - 3.5 hours) x $70.4014:
actual overhead hours = (-$6,000 / $70.4014) + 12,425 hours = -85.23 + 12,425 = 12,339.77 hours
If a firm belives tht some of its debtors may default and it should act on this by making sure tht all possible losses are recorded in the books this is an example of which concept
Answer: Conservatism
Explanation: The conservatism concept can be ncept may be explained as an accounting principle which ensures that an organization tends to be very careful in handling its finances, with the conservatism concept, financial management often lean towards an approach which tends to play down future gains and concentrate more on potential chances of losses in the future. With such approach the organization tends to be very prudent in its financial management. In other words, conservatism shifts toward a tendency to understate its asset or income rather than overstate its asset.
How can the government efficiently encourage an optimal level of research and
development?
O All of these answers
Provide grants to academic and private researchers
O Fund research directly
O Enforce an effective patent system
Answer:
Enforce an effective patent system
Explanation:
Patent is defined as the government authority that bestows the full right and title of ownership to an investor in order to keep others away from making and selling such invention for a defined period of time.
The enforcement of effective patent system serves as incentives for optimal level of research and development as researchers feel recognized for their efforts and will be willing to do more as they know that inventions are now protected from duplication by others . Moreover , returns in investment are now guaranteed.
Vivienne has four files she needs Bill to review. She sends Bill the file path to
where the files are saved on the server. When Bill opens the folder, he sees
the following files:
Section 1_final.docx
Section2_final vv.doc
Section3_v2.docx
section 4_final.doc
Bill sees that Vivienne may benefit from some tips about file organization.
Which of the following would be the most helpful tip?
A. The filenames should always contain Vivienne's full name.
B. The filenames should not distinguish between the different
sections.
C. The files that are not yet final should be stored separately from
files that are final.
D. The files should all be the same file type.
Answer:c: the files that are not yet final should be stored separately from files that are final
Explanation:just took the test
Answer:
C
Explanation:
The adjusted trial balance for Yondel Company at December 31, 2018 is presented below: Accounts Debit Credit Cash $ 8,000 Prepaid rent 23,000 Land 445,000 Accounts payable $ 12,000 Salaries payable 20,000 Common stock 230,000 Retained earnings 109,000 Dividends 14,000 Service revenue 340,000 Salaries expense 160,000 Rent expense 29,000 Utilities expense 32,000 Totals $ 711,000 $ 711,000 Prepare the closing entries for Yondel Company for the year ended December 31, 2018.
Answer:
Explanation:
Cash =8000
Prepaid rent = 23,000
Land = 445000
Accounts payable = 12,000
Salaries payable = 20,000
Retained earnings = 109,000
Dividends = 14,000
Service revenue = 340,000
Salaries expenses = 160,0000
Rent expenses = 29,000
Utilities expenses = 32,000
Net income = Service revenue - Salaries-Rent-Utilities-
=340,000-160,000-29,000-32,000 = 119,000
Journal
1. Debit Service revenue - 340,000
Credit income summary - 340,000
2, Debit Income summary - 221,000
Credit Salaries expenses 160,000
Credit Rent expenses 29,000
Credit Utilities expenses 32,000
3 Debit Income summary 119,000
Credit retained earnings 119,000
4 Debit retained earnings 14,000
Credit retained earnings 14,000
What does the Paradox of Value explain
Answer:
The paradox of value (also known as the diamond–water paradox) is the contradiction that, although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market.
Explanation:
Why is it important for insurance companies to have a large pool of people paying premiums?
Answer:
The premium payments of all the insured clients will cover the costs for the emergencies of the few who need it. The more people that pay premiums, the less likely each insured client will experience an emergency.
It is important for insurance companies to have a large number of people paying premiums in order to have the higher costs than the needy would have to be offset by the lower costs of the less needy.
If a risk pool is larger than it is, it is very helpful because it would make the premiums to be more stable as well as to be more predictable.
Pooling is very beneficial due to the fact that the cost of health care could be high and they could lead to significant costs. Risk pooling would help to ensure that those that are in need would be able to afford it when necessary.
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