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Elis [28]
3 years ago
8

Consider a bank that has the following balance sheet: Liabiiiies Reserves $200 Deposits $960 Loans $800 Equity $40 Suppose some

of the loans made were "bad", so the value of the bank’s loansgoes down by 5%. Which of the following statements is true ?a) The value of equity is $30
b) The value of equity is $20
c) The value of equity is $10
d) The value of equity is $0
e) None of the above
Business
1 answer:
Andru [333]3 years ago
7 0

Answer:

d) The value of equity is $0

Explanation:

Bank loans are classified as performing and nonperforming loans. Nonperforming loans that stay for over a long period (usually 12 months) are considered to be a loss.

When a bank makes a loss on loans (loan goes bad due to nonrepayment) they make provisions and debit the business equity for the loss.

The given loan amount is $800 and the bank had to provision 5% of that amount.

Loss from loan= 800* 0.05= $40

This is deducted from equity= 40- 40= $0

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The fiscal year-end 2016 financial statements for Walt Disney Co. report revenues of $55,632 million, net operating profit after
fredd [130]

Answer:

Option (C) is correct.

Explanation:

Given that,

Revenues = $55,632 million

Net operating profit after tax = $9,954 million

Net operating assets at fiscal year-end 2016 = $58,603 million

Net operating assets at fiscal year-end 2015 = $59,079 million

Net operating profit margin is determined by dividing the net operating profit after tax by the total amount of revenues during a fiscal year.

Net operating profit margin:

= (Net operating profit after tax ÷ Revenues) × 100

= ($9,954 ÷ $55,632) × 100

= 0.1789 × 100

= 17.89%

7 0
3 years ago
A firm uses 80 hours of labor and 6 units of capital to produce​ 10,000 gadgets per day.​ Labor's marginal product is 4 gadgets
Andreas93 [3]

Answer:

Use more labor and fewer capital.

Explanation:

Given that,

For producing 10,000 gadgets,

Labor hours use = 80

Capital = 6 units

Marginal product of labor = 4 gadgets per hour

Marginal product of capital = 20 gadgets per unit

Cost of each unit of labor = $8 per hour

Cost of each unit of capital = $50 per unit

Therefore,

Marginal product per dollar for labor is as follows:

\frac{MP_{L} }{w} =\frac{4}{8}

        = 0.5

Marginal product per dollar for capital is as follows:

\frac{MP_{k} }{r} =\frac{20}{50}

        = 0.4

Hence, the marginal product per dollar for labor is greater than the marginal product per dollar for capital, which means that the firm should use more labor and fewer capital.

5 0
3 years ago
Points 4 you. Take them
Ugo [173]

Answer:

uhm ok

i guess so

5 0
2 years ago
Read 2 more answers
Board Company has a foreign subsidiary that began operations at the start of 2017 with assets of 134,000 kites (the local curren
Mama L [17]

Answer: Please refer to Explanation

Explanation:

1 October 2017

No entry required as contract not yet exercised

31st December 2017

DR Forward Contract (220,000*(0.67-0.66)) $2,200

CR Translation Adjustment $2,200

(To record change in value of forward contract )

31st December 2017

DR Foreign Currency (Kites) (220,000*0.66) $145,200

CR Cash $145,200

(To record purchase of foreign currency)

31st December 2017

DR Cash ( 145,200 + 2,200) $147,400

CR Foreign Currency (Kites) $145,200

CR Forward Contract $2,200

(To record delivery of foreign currency and forward contract execution)

3 0
3 years ago
Identify two possible reasons for unemployment​
Vladimir79 [104]

Answer:

Frictional unemployment. This is unemployment caused by the time people take to move between jobs, e.g. graduates or people changing jobs. ...

Structural unemployment

Explanation:

3 0
2 years ago
Read 2 more answers
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