Answer:
$300,000
Explanation:
Data provided in the question;
Interest rate spread of the bank = 150 basis points
Earning assets funded by interest-bearing liabilities = $30 million
Now,
The new interest rate spread = 150 basis points - 50 basis points
or
The new interest rate spread = 100 bps
or
The new interest rate spread = 1%
Therefore,
the bank's new pretax net interest income will be
= $30 million × 1%
= $30,000,000 × 0.01
= $300,000
Answer:
Reducing risk
Explanation:
The two ways by which risk can be managed are;
✓ Risk avoidance
✓ risk reduction
risk reduction are activities needed to bring about lower likelihood of risk as well as severity of loss. We can reduce risk through reduction of allocation of our resources to risky situation. An example of reducing risk is in the instance of Financial markets that are making the process of borrowing large amounts of money easier because they simplify the negotiation process between borrowers and lenders.
Answer:
22.7 %
Explanation:
Accounting rate of return = Average Profits / Average Investments × 100
Where,
Average Profit = Sum of Profits ÷ Number of Years
= $35,000
and
Average Investment = (Initial Investment + Salvage Value) ÷ 2
= ($278,000 + $30,000) ÷ 2
= $154,000
Therefore,
Accounting rate of return = $35,000 ÷ $154,000
= 22.7 %
Answer and Explanation:
The effect of this overstatement on Conversion cost equivalent units would be overstated and in physical units manufactured it would have no effect.
Conversion cost is the sum of Direct labor and Manufacturing overheads. Therefore, an overstatement in it would mean an overall overstatement in the Conversion cost equivalent units. However, this overstatement would have no affect on the physical units as it has not affected the physical units in any way.
