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JulsSmile [24]
3 years ago
7

For many years you have been using your local, small-town bank. One day you hear that the bank is about to be purchased by Bank

of America. From your vantage point as a retail bank customer, what are the costs and benefits of such a merger?
Business
1 answer:
kari74 [83]3 years ago
7 0

Answer:

If I was banking with my local town bank and it happens that Bank of Africa purchases it, there are cost and benefits associated with the merge. First, Bank of America is global, meaning that I will be able to access the Services such as ATM services at different points. Second, due to its area of coverage, the services are cheaper compared to the ones I got when it was in my local town. However, due to the monopoly of the bank, they might increase the charges making them more expensive than when the services in the local village. Additionally, it will be a challenge for average customers, such as farmers, to access big banks unless faithful people accompany them.

Explanation:

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2. Let’s work out a simple example where a person smooths her consumption over time. Gwen is a real estate agent, and she knows
Pepsi [2]

Answer:

A) How much should Gwen consume in the average year?

Gwen should consume the average money she earns taking into account the good and bad years.

In the good years, she is earning $90,000, and in the bad years she is earning $20,000. We simply obtain the average:

$90,000 + $20,000 = $110,000/2 = $55,000

B) How many dollars will she save during the good years?

Personal saving equals disposable income minus consumption. As stated above, during the good years she will consume $55,000, while having a disposable income of $90,000. Her personal saving will then be:

$90,000 - $55,000 = $35,000

C) How many dollars will she borrow during the bad years?

During the bad years, Gwen is making $20,000, while consuming an average of $55,000 per year. Therefore, her total borrowing during the bad yeras is:

$55,000 - $20,000 = $35,000

In other words, for every bad year, she will exhaust a total good year's savings.

8 0
3 years ago
Keynesian economists believe that the economy needs to be influenced in order to correct itself from the effects of unemployment
gregori [183]

Answer: fiscal policy

Explanation:

Fiscal policy simply means when the revenue and expenditure of the government is used to influence the economy of a particular country.

Keynesian economists believe that the economy needs to be influenced in order to correct itself from the effects of unemployment and inflation. This can be done through fiscal policies. According to the Keynesians, the demand from consumers has an effect on the aggregate expenditure.

4 0
3 years ago
To join an upscale country club, an individual must first purchase a membership bond for $30,000. In addition, monthly membershi
Ronch [10]

Answer:

lump sum= 19,925

Explanation:

Giving the following information:

To join an upscale country club, an individual must first purchase a membership bond for $30,000. In addition, monthly membership dues are $250. Suppose an individual wants to put aside a lump sum of money now to pay for her basic country club membership expenses (including the $30,000 bond) over the next 30 years. She can earn an APR of 6%, compounded monthly, on her investments.

First, we need to calculate the total amount of money needed:

Final value= 30,000 + 250*12*30= 120,000

Now, we need to use the following formula:

PV= FV/(1+i)^n= 120,000/1.005^360= 19,925

7 0
3 years ago
​Johnny's Shop-and-Pay is a regional grocery​ chain, and its marketing manager is trying to determine the​ profit-maximizing cou
insens350 [35]

Answer:

50% discount

Explanation:

We have the formula

price = marginal cost*(E/(E + 1) )

We are given the following:

price per unit item = $10

elasticity of demand, E = -3 for coupon users

marginal cost MC = ?

Hence

10 = MC * (-3/(-3 + 1))

10 = MC * 1.5

MC = 10 / 1.5 = 6.67

So, the appropriate discount that can be given is

price - marginal cost = 10 - 6.67 = $3.33 per box

OR  3.33 / 6.67 = 50% discount over cost.

8 0
3 years ago
On January 1, 2018, VKI Corporation awarded restricted stock units (RSUs) representing 19 million of its $1 par common shares to
zysi [14]

Answer:

1. Total compensation cost= $96.9 m

2. Compensation expense  $32.3 m

                       paid-in capital - restricted stock   $32.3m

Explanation:

The question relates to 'EQUITY GRANT', which is some sort of compensation given to somebody, especially/specifically to employees of an entity provided that certain conditions/vesting requirements are satisfied by the employee. For example, an entity in it's initial phases of growth (because certain entities don't have the money/working capital in initial stages of business) offers it's employees to stay within the entity for at least three years during which no stipend will be paid but shall receive equity ownership thereafter. In such a situation the employer grants them equity once the vesting requirement is satisfied by the employees.

<em>So at the time of of awarding, no entry is passed with respect to RSUs but at each reporting date the entity records a certain amount in equity account. Total compensation cost is calculated as follows:</em>

Total compensation cost = 19 m×$5.10

TCC= $96.8M

The RSUs are split into three year period as follows:

Yearly equity recognition: $96.9m÷3= $32.3m

So at 31 December 2018 VKI Corporation would charge $32.3m to the equity account. The entry is as follows:

Compensation expense  $32.3 m

                       paid-in capital - restricted stock   $32.3m

8 0
3 years ago
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