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4 years ago

Why would a bank require a borrower to have collateral or a cosigner before agreeing to lend funds?

Business

2 answers:

pantera1 [17]4 years ago

7 0

Answer:

The correct answer is letter "B": reduces risk associated with imperfect information.

Explanation:

Collateral is any type of property borrowers of a debt instrument have that can be taken as part of repayment if the borrower does not fulfill his payment obligation after a certain period.

Co-signers are individuals who sign for a debt instrument along with the borrower. They become an additional source of payment and in most cases, they are helpful for the borrower to be approved in the line of credit.

Thus, collateral and co-signers are requested by financial institutions to reduce the risk the borrower will not be responsible for the debt. Optimal credit histories can be considered imperfect information since they do not guarantee a debtor will be responsible for a debt.

anyanavicka [17]4 years ago

3 0

Answer:

B. Reduces risk associated with imperfect information.

Explanation:

The correct answer is B. Reduces risk associated with imperfect information. The bank requires a borrower to have a cosigner or collateral when lending funds to the borrower which reduces the risk of imperfect information and acts as guarantee. Cosigner is a person who is held liable if the borrower of the loan funds is unable to pay the loan amount.

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Capri Industries is considering an investment that has an initial cost of $26,500 and the following expected cash inflows: Year

kupik [55]

Answer:

It will take 3.5 years to cover the initial investment.

Explanation:

Giving the following information:

Initial investment= $26,500

Cash flows:

1 6,000

2 8,000

3 10,000

4 5,000

5 3,000

The payback period is the time required to cover the initial investment:

Year 1= 6,000 - 26,500= -20,500

Year 2= 8,000 - 20,500= -12,500

Year 3= 10,000 - 12,500= -2,500

Year 4= 5,000 - 2,500= 2,500

To be more accurate:

(2,500/5,000)= 0.5

It will take 3.5 years to cover the initial investment.

5 0

3 years ago

Can someone please help me do the cash flows with ZInser and without Zinser? I would really appreciate it. I am really stuck on

vichka [17]

Answer:

It's blur can u repost it so that i can see it

6 0

2 years ago

Brown Co. pays weekly salaries of $10,500 on Friday for a five-day work week ending on that day. Assuming the end of the account

algol [13]

Answer:

Explanation:

The adjusting entry is shown below:

Wages Expense A/c Dr $6,300

To Wages payable A/c $6,300

(Being the wages are adjusted)

The computation is shown below:

= Five days salaries ÷ number of days in a week × given days

= $10,500 ÷ 5 days × 3 days

= $6,300

So, the wages expense is debited for $6,300 and wages payable is credited for $6,300

4 0

4 years ago

Departmental contribution to overhead is calculated as the amount of sales of the department less: Direct and indirect costs. Pr

GuDViN [60]

Answer:

Direct expenses.

Explanation:

The departmental contribution is determined by deducting the direct expense from the amount of sales

In mathematically,

The following formula should be used

Departmental contribution = Department revenues - direct expense

Here The expenses to be - rent, utilities, taxes, insurance, etc

ANd, It is arrive after paying off the direct expenses that related to the overhead.

4 0

3 years ago

uestion 31 Oriole Company has the following inventory data: July 1 Beginning inventory 114 units at $19 $2166 7 Purchases 399 un

lina2011 [118]

Answer:

$7,714

Explanation:

The computation of the cost of good sold under LIFO method is shown below

But before that following calculations need to be done

Goods sold = Beginning inventory + Purchases - Ending inventory

= 114 + (399 + 57) - 190

= 380 units

Now 380 units sold would include 57 units of July 22 purchases and balance i.e. (380-57) 323 units of July 7 purchases

So, cost of goods sold

= (57 × 22) + (323 ×20)

= $7,714

7 0

3 years ago