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Old 12-29-2016, 06:40 PM
mylittleactuary mylittleactuary is offline
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Default How much do I need to know about mining?

Obviously, this isn't a totally serious question, but I am kind of confused about the level of line item analysis we're expected to do in the EOM1 exercise. Inspections are singled out in the exercise description, so I got that part, but what about, I don't know, pump maintenance? Is this also something Can-Do's plumber can do for free, in this universe where additional employee time doesn't have a cost? Is there a right answer here or is it sufficient to explain the decisions you made in the memo?

Would appreciate some guidance/reassurance. Thanks!
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Old 12-29-2016, 06:57 PM
walker023 walker023 is offline
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I worked as coal miner in a West Virginia coal mine for 9 months to prepare for and complete this exercise.
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Old 12-29-2016, 07:01 PM
mylittleactuary mylittleactuary is offline
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Quote:
Originally Posted by walker023 View Post
I worked as coal miner in a West Virginia coal mine for 9 months to prepare for and complete this exercise.
I do have a sabbatical coming up...
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Old 12-30-2016, 01:38 PM
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kidactuary kidactuary is offline
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I do have a sabbatical coming up...
I don't remember exactly which costs I ignored but I know they did not line up with what they had in the answer key, and I still MMR'd. As long as you justify your answer you should be fine
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Old 12-30-2016, 01:58 PM
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FreeYoMind FreeYoMind is offline
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Quote:
Originally Posted by walker023 View Post
I worked as coal miner in a West Virginia coal mine for 9 months to prepare for and complete this exercise.
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Old 12-30-2016, 02:12 PM
bigb bigb is offline
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The goal isn't to test you knowledge of mining per se, but rather applying fundamental actuarial principles to a setting outside of what most would consider "traditional".

You want to purchase a set of cashflows far out into the future, how do you represent those cashflows in today's dollars, how do you incorporate any synergies (savings) your current company may have (the exercise provides a couple examples I believe). If the mine you are purchasing has costs included for annual inspections, maybe you reduce those completely or recognize only a % of them since your current company already has a budget for this, etc etc.
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Old 12-30-2016, 08:33 PM
mylittleactuary mylittleactuary is offline
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Thanks everyone. I'm going to try not to overthink it and just do something that is reasonable and justify it in the memo. It sounds like they don't fail you just because your answer doesn't exactly match theirs.
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