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Yakvenalex [24]
3 years ago
8

What is the repricing gap if the planning period is 30 days? 3 months? 2 years? Recall that cash is a noninterest-earning asset.

b. What is the impact over the next 30 days on net interest income
Business
1 answer:
Tcecarenko [31]3 years ago
7 0

Answer:- -$95 million for 30days,  -$20 million for 3 months, +$55 million for 2 years.

Explanation:

Repricing gap using a 30-day planning period, we have;

$75 - $170 = -$95 million.

Repricing gap using a 3-month planning period, we have;

($75 + $75) - $170 = -$20 million.

Reprising gap using a 2-year planning period, we have;

($75 + $75 + $50 + $25) - $170 = +$55 million.

b) the impact over the next 30 days on net interest income vary. Let us use i) when net income increases by 50 basis points.

      ii) when net income decreases by 75 basis points.

if impact over the next 30 days on net interest income increases by 50 basis points, we would have that  net interest income will decrease by $475,000, see below:

ΔNII = CGAP(ΔR) = -$95m.(0.005) = -$0.475m

If  impact over the next 30 days on net interest income decrease by 75 basis points, net interest income will increase by $712,500.  This is because:

ΔNII = CGAP(ΔR) = -$95m.(-0.0075) = $0.7125m

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2 years ago
Jones Company has the following data to make 10,000 seats for its bicycles: Variable Product Costs 80,000 Fixed Product Costs 10
klasskru [66]

Answer:

The company should make the bicycle seats.

Explanation:

Given:

Number of seats to be made = 10,000

Variable cost = 80,000

Fixed cost = 10,000

Outside source cost for seats = $ 8.50 per seat

Since, the fixed cost of the seats cannot be eliminated. Therefore, the deciding factor will only be the variable cost.

Thus,

contribution margin per unit seat if made by own

= ( Variable cost / Number of seats )

Or

= 80,000 / 10,000

or

= $ 8

now,

the making the seats by own is $ 0.5 cheaper.

Hence, the company should make the bicycle seats.

4 0
3 years ago
Flexible budgets and variance analysis are very useful tools for managers, but are sometimes difficult to understand. Find an on
Anettt [7]

Answer:

Flexible budgets: These type of budgets are assessments, which may vary with the capacity or production for a given period.

Say for model there might be two type of budgets which bend with two or three situations of fabrication volume or production. The situations might be:

1. Budget when fabrication is at highest volume, the revenue and expenditures at the utmost output.

2. Budget when there is prime capacity, the revenue and expenditures valued at the optimal application of resources to produce optimal productivity or satisfactory output.

3. Budget when there is low capacity or demand is nearly nil, the revenues and expenditures that will be valued.

This flexible budget guides administration to appropriately plan their resources and flex with the capacity whenever it’s required subject the change in situations.

Variance Analysis: The investigation of deviance of several cost restriction with the usual set in at the start of the year results in Variance Analysis. There are several types of modifications which needs analysis and these will be diverse with the business type. The below are few common instances of modifications.

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5 0
2 years ago
Which of the following activities would be most helpful in figuring out what your company's competitive advantages are?
Dennis_Churaev [7]
Checking your profits vs expense, and seeing which areas generate more profit. From there, you can choose between putting more money into the areas that are more profitable to you & decreasing the amount of money into areas that don't do as well, or continue another season to see if it is the same (as results can vary depending on the supply vs demand)

hope this helps
8 0
3 years ago
Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost charact
Yuri [45]

Answer:

a. 7,900

b. 10,100

Explanation:

As for the provided information,

We know at break even point taxes shall be = 0 as there are no profits and no losses.

a. At break even: = \frac{Fixed\ Cost}{Contribution}

Fixed Cost = $308,100

Contribution per unit = Selling price - Variable cost = $79 - $40 = $39

Therefore, break even units = \frac{308,100}{39} = 7,900 smokers

b. In case the company wants a profit of $51,480 after tax @ 40% then,

Earnings before taxes = \frac{51,480}{1 - 0.4} = $85,800

Therefore, number of units = \frac{Fixed\ Cost + Profit\ before\ tax}{Contribution\ per\ unit}

= \frac{308,100 + 85,800}{39} = 10,100

5 0
3 years ago
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