Question

What is the advantage of using a cash flow method to determine profit margins and premium rates?

a.

It provides an exact calculation of profit

b.

It allows for easy comparison between different products

c.

It eliminates the need for making assumptions

d.

It guarantees a higher return on investment

Answer: (b).It allows for easy comparison between different products Explanation:The advantage of using a cash flow method to determine profit margins and premium rates is that it allows for easy comparison between different products in terms of their profitability.

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Q. What is the advantage of using a cash flow method to determine profit margins and premium rates?

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