Capital, Credit, and Insurance

Under the principle of contribution, a property owner who holds separate indemnity fire insurance policies with two different insurance companies for the same commercial warehouse is entitled to collect the full value of compensation from both insurers in the event of a total loss.

A commercial printing firm acquires heavy-duty industrial printing equipment under a hire purchase agreement. The cash price of the machinery is $₦4,500,000$. The contract mandates an initial down payment of $20\%$ of the cash price, with the remaining balance paid in $18$ equal monthly installments of $₦225,000$ each. What is the total interest charge paid on this transaction in Naira?

The financial records of Folake Traders at the close of the trading year show the following balance sheet balances:

What is the working capital of Folake Traders?

The following financial balance summary belongs to Kofi Retail Enterprises at the end of its trading period:

- Fixed Assets: $\text{₦}1,800,000$
- Current Assets: $\text{₦}650,000$
- Current Liabilities: $\text{₦}250,000$
- Long-term Loan: $\text{₦}400,000$

What is the Capital Employed of the business?

The accounting balances extracted from the books of Nkem Commercial Enterprises at the end of its financial year are as follows:

What is the net working capital of the enterprise?

Mr. Adebayo insured his life for ₦10,000,000. Upon his passing, the insurance company paid the full sum of ₦10,000,000 to his named beneficiary without attempting to assess the monetary value of his loss. Why does the principle of indemnity fail to apply to life assurance contracts?

Under the principles of commercial insurance, a property owner who takes out a fire insurance policy on a commercial building must possess an insurable interest in the property both at the time the policy is issued and at the time the loss occurs.

A logistics firm's delivery van valued at ₦12,000,000 was damaged in a road collision caused by a third party's negligence, resulting in ₦4,000,000 worth of structural damage. The insurance company fully indemnified the logistics firm for the ₦4,000,000 loss. When the logistics firm subsequently attempted to sue the negligent third party to recover another ₦4,000,000 for the exact same damage, the court dismissed the firm's suit. Which basic principle of insurance legally empowers the insurer to step into the shoes of the insured and assume their rights of recovery against negligent third parties?

Chief Emeka attempts to take out a fire insurance policy on his neighbor's commercial warehouse, despite having no financial stake or legal connection to the property. The insurance company refuses to issue the policy on the grounds that he does not stand to suffer any direct financial loss if the building is destroyed. Which basic principle of insurance is Chief Emeka failing to satisfy?

A bill of exchange that has been endorsed in blank by the holder becomes payable to bearer and may subsequently be negotiated by mere physical delivery.

The principle of indemnity allows an insured person to profit financially from an insurance claim by recovering an amount greater than the actual financial loss suffered.

Match each commercial credit arrangement to its correct defining characteristic regarding legal ownership and vendor rights upon default.

An agricultural exporter based in Ibadan dispatches multiple cargo consignments by sea throughout the trading year. Rather than obtaining a separate contract for every single voyage, the firm purchases an insurance policy covering a lump-sum estimate of total cargo value, declaring individual shipment details to the insurer as each vessel departs until the total sum is exhausted. Which marine insurance policy best describes this arrangement?

A standard Fire Insurance policy automatically indemnifies a business owner against the loss of projected net profits and standing charges arising from operational disruption caused by a fire outbreak.

Match each insurance risk-sharing concept on the left with its corresponding operational description on the right.

A commercial transport company purchases five haulage trucks under a deferred payment credit agreement. After paying two installments, the company defaults on the third payment. Which of the following correctly describes the legal right of the vendor regarding the trucks?

A merchant issues a written instrument explicitly promising to pay a named supplier a specified sum of money on a fixed future date, without involving a third-party drawee to accept the document. Which credit instrument has the merchant executed?

A merchant insured his commercial warehouse against fire outbreak. During an electrical storm, lightning directly struck an adjacent tree which fell on the warehouse roof, severing live electrical wires and triggering a fire that consumed the stored goods. In determining whether the insurer is legally liable to compensate the merchant, which principle of insurance is primarily applied to determine the direct and dominant cause of the loss?

Sovereign Industries Ltd insured its manufacturing complex against fire risk under a policy jointly underwritten by Firm P (60% share) and Firm Q (40% share). To guard against catastrophic loss, Firm P reinsured 50% of its assumed risk with Firm R. Following a fire that caused $\text{N}500\text{ million}$ in damages, Sovereign Industries submitted a claim directly to Firm R for $\text{N}150\text{ million}$. Which statement accurately describes the legal rights of the insured and the financial liability of Firm P?

An insurance firm accepts a policy for a factory but transfers a fraction of the risk to another insurer to shield itself from excessive loss. Which insurance concept describes this arrangement between the two insurance firms?