1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sholpan [36]
3 years ago
8

A bank can decrease the degree of moral hazard if it a. ​Monitors the borrowers behaviors b. ​Placing covenants on the loan c. ​

Both of the above d. ​None of the above
Business
2 answers:
jeyben [28]3 years ago
7 0

Answer:

C. Both of the above

Explanation:

marshall27 [118]3 years ago
3 0

Answer:

The correct answer is letter "C": Both of the above.

Explanation:

In banking, moral hazard represents all of those negative behaviors consumers have that could lead to incurring in debt. There are several reasons why borrowers can fall into dent but <em>banks can reduce the losses risk by checking their credit reports to find out if borrowers are incurring much debt they can handle. </em>

Besides, <em>by setting clear loan terms, banks make sure borrowers are subject to penalties in case of not fulfilling their repayment obligations.</em>

You might be interested in
Assume the company is considering investing in a new machine that will increase its fixed costs by $42,500 per year and decrease
Semenov [28]

Answer:

The company should purchase the machine.

Explanation:

Note: The complete question is attached below

Forecasted contribution margin income statement

For the Year Ended December 31

Particulars                                       Amount$

Sales                                                2,440,000

Variable cost(10,000*185(195-10))  <u>1,850,000</u>

Contribution margin                        590,000

Fixed cost (327,600+42,500)         <u>370,100</u>

Income                                              <u>$219,900</u>

Because the income increase by $57,500 due to the pruchase, the company should purchase the machine

8 0
2 years ago
Martinez Company has an old factory machine that cost $66,000. The machine has accumulated depreciation of $36,960. Martinez has
brilliants [131]

Answer:

Journal entries

Explanation:

The journal entries are as follows

(a) Cash A/c Dr $33,000

   Accumulated depreciation A/c Dr $36,960

            To Factory machine A/c $66,000

            To Profit on sale of factory machine A/c $3,960

(Being the sale of machinery is recorded and the remaining balance is credited to the profit on sale of factory machine account)

(b) Cash A/c Dr $19,800

    Loss on sale of factory machine A/c $9,240

    Accumulated depreciation A/c Dr $36,960

            To Factory machine A/c $66,000

(Being the sale of machinery is recorded and the remaining balance is debited to the loss on sale of factory machine account)

8 0
3 years ago
JLR Enterprises provides consulting services throughout California and uses job-order costing system to accumulate the cost of c
Shkiper50 [21]

Find full question attached

Answer and Explanation:

Answer and explanation attached

6 0
3 years ago
2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-qua
Vadim26 [7]

The original data is :

Data for Hermann Corporation

                                          Per unit     Percent of sales

Selling price                         $ 75              100%

Variable expenses                  51                 68

Contribution margin             $ 24               32%

The fixed expenses are $ 75,000 per month and the company is selling 4000 units per month.

Solution :

                                                     Present             Proposed

Sales                                             300000            375000

Less : Variable cost                      204000           275000

Contribution margin                     96000               100000

Less : Fixed expenses             <u>    75000     </u>      <u>     75000    </u>

Net income                                   21000                25000

The net operating income :      Increases          4000

Net operating income = increased sales Net income - current sales net income.

Therefore the higher quality component should be used.                                                            

8 0
2 years ago
Galvanized Products is considering purchasing a new computer system for their enterprise data management system. The vendor has
alekssr [168]

Answer:

The present worth of this investment = -$31,204.78

Explanation:

Note: See the attached excel file for the calculation of the present worth of this investment (in bold red color).

In the attached excel file, the following are used:

Loan from bank = Purchase price * (1 / 4) = $130,000 * (1 / 4) = $32,500

Initial cost = Purchase price - Loan from bank = $130,000 - $32,500 = $97,500

The annual required equal loan payments is calculated using the formula for calculating loan amortization as follows:

P = (A * (r * (1 + r)^n)) / (((1 + r)^n) - 1) .................................... (1)

Where,

P = Annual required equal loan payment = ?

A = Loan amount from bank = $32,500

r = interest rate = 12%, or 0.12

n = number of payment years = 3

Substituting all the figures into equation (1), we have:

P = Annual required equal loan payment = ($32,500 * (0.12 * (1 + 0.12)^3)) / (((1 + 0.12)^3) - 1) = $13,531.34

From the attached excl file, the present worth of this investment is equal to -$31,204.78

Download xlsx
3 0
3 years ago
Other questions:
  • Gracie showed up at a new hair salon with her special color treatment coupon. A hairdresser named Bunny applied the color to Gra
    5·1 answer
  • Consider the​ following: Year Population ​(Millions) Real GDP ​($ Billions) GDP Deflator 2018 121 2019 125 Calculate the percent
    9·1 answer
  • Wisconsin Cheddar has introduced an aged jalapeno cheddar. Displays are set up at various retail cheese stores in the state and
    10·1 answer
  • House Loan. Suppose you take out a home mortgage for $180,000 at a monthly interest rate of 0.5%. If you make payments of $1000/
    10·1 answer
  • Which of the following is a potential benefit of inflation?
    14·2 answers
  • 1. Which of the following increases when the Fed makes open-market sales?
    6·1 answer
  • Complementary and substitute goods
    15·1 answer
  • Rover Corporation purchased a truck at the beginning of 2017 for $109,200. The truck is estimated to have a salvage value of $4,
    9·1 answer
  • Gato Inc. had the following inventory situations to consider at January 31, its year-end. (a1) Identify which of the following i
    10·1 answer
  • Which phrase best completes the diagram? Macroeconomic Goals for a Society ? Stable prices Economic growth
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!