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kupik [55]
3 years ago
9

A bank money manager estimates that the bank will experience a liquidity deficit of $400 million with a probability of 10 percen

t, a liquidity deficit of $900 million with a probability of 20 percent, a liquidity surplus of $600 million with a probability of 30 percent, and a liquidity surplus of $1,200 with a probability of 40 percent over the next month. What is this bank's expected liquidity deficit or surplus next month? A. $880 million liquidity surplus B. $440 million liquidity deficit C. $440 million liquidity surplus D. $880 million liquidity deficit E. None of the options is correct
how is the answer C how do we solve it?
Business
1 answer:
Vikki [24]3 years ago
7 0

Answer:

C. $440 million liquidity surplus

Explanation:

The computation of the expected liquidity deficit or surplus is shown below:

= Liquidity deficit × probability + liquidity deficit × probability + liquidity surplus × probability + liquidity surplus × probability

= -$400 million × 10% + -$900 million × 20% + $600 million × 30% + $1,200 million × 40%

= -$40 million - $180 million + $180 million + $480 million

= $440 million liquidity surplus

The surplus amount displayed in positive amount whereas deficit amount displayed in negative amount

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Previn Brothers Inc. purchased land at a price of $26300. Closing costs were $1300. An old building was removed at a cost of $10
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Answer:

$38,000

Explanation:

The computation of the cost of the land is shown below:

= Purchase price of land + closing cost + removal cost of an old building

= $26,300 + $1,300 + $10,400

= $38,000

In order to find out the cost of the land, we simply added the purchase value of land, its closing cost and the removal cost of an old building

3 0
2 years ago
The Eastern Division sells goods internally to the Western Division at Tennessee Company. The quoted external price in industry
Gennadij [26K]

Answer: Market based transfer pricing

Explanation:

A transfer price is the price which is charged by one division of an organization for the product or service which is supplied to another division of the same organization.

The three main criteria which must be satisfied by transfer pricing system in the decentralized company are:

(1) provision of information that allows central management to assess the divisions based on their contribution to total profit of the company

(2) stimulate every manager’s efficiency without the loss of the division’s autonomy.

(3) motivation of the divisional managers in order to accomplish their own profit goal in a way that contributes to the success of the company.

This is market based transfer pricing because the $220 transfer price that is selected is based on quoted external price.

7 0
3 years ago
WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for t
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Answer:

yes yes NO ( A  )

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products X,Y,Z

units produced : X = 1500 , Y = 2000,  Z = 3000

per unit sales value at split-off : X = $19, Y = $21,   Z = $24

Added processing costs per unit : X = $7, Y = $7.50 , Z = $7

per unit sales value if processed further : X = $29, Y = $29, Z = $30

COST OF JOINT MATERIAL INPUT = $149000

To check for products to be processed further we apply

(unit sales value if processed further - per unit sales value at split-off ) - ( added processing cost )

for product  X = $29 - $19 - $7 = $3

for product Y = $29 - $21 - $7.5 = $0.50

for product Z = $30 - $24 - $7 = - $1  ( negative value )

products to be processed beyond the split of point would be : X Y

because Z  has a negative contribution margin

4 0
2 years ago
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