Wearing a seat belt, not texting when driving, and driving carefully are all examples of...
insurance policies.
risk management strategies.
deductibles.
warranties.

The correct answer is option (E) $4,000 to repair the damaged van.

Explanation:

Solution

The initial cost of  salvage value  and damaged van immediately before cash are not important in making the decision.

The  cost to repair the damaged van , salvage value of van immediately after the crash, and cost of a comparable used van are important in making the decision.

The next step is to Compute the comparison between repairing the van or buying a comparable used van:

Cost of comparable used van                                    $10,000

Less: Salvage value of van immediately after crash $1,000

The net cost of comparable used van (A)                  $9,000

The cost to repair damaged van                                 $5,000

The net benefit in repairing of damaged van (A-B)   $4,000

Therefore, The company will be better off by $4,000 to repair the damaged van.