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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, <em>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.</em>

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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Which statement is TRUE regarding gross living area (GLA) in an exterior-only inspection appraisal for Fannie Mae

Rom4ik [11]

The appraiser must identify the data source for the GLA.

Is TRUE regarding gross living area (GLA) in an exterior-only inspection appraisal for Fannie Mae

Property valuation, property valuation, or land valuation is the process of creating a property valuation (usually market value). Real estate transactions are traded daily and, in contrast to corporate stocks that are identical, are infrequent and each property is unique (especially its condition, an important factor in valuation) and may require the valuation.

The location also plays a decisive role in the evaluation. However, real estate cannot be relocated, so it is often the upgrade or improvement of a home that can change its value. Evaluation reports are the basis for mortgages, real estate planning, divorce, taxation, and more. Valuation reports are sometimes used to set the sale price of a property.

In addition to various compulsory education levels from finance to civil engineering, most, if not all, countries require appraisers to be licensed to practice.

Learn more about Appraisal here: brainly.com/question/843074

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3 0

2 years ago

. Intellus has long-term debt of $5 million, owners' equity of $7.5 million, current assets of $1 million, gross fixed assets of

stich3 [128]

Answer:

- $0.5 million

Explanation:

The computation of the net working capital is shown below:

We know that

Net working capital = Current assets - current liabilities

where,

Current assets = $1 million

The net fixed assets = Gross fixed assets - Accumulated depreciation

= $20 million - $7 million

= $13 million

Total assets = Current assets + net fixed assets

= $1 million + $13 million

= $14 million

And,

Total assets = Total liabilities + owners equity

$14 million = Total liabilities + $7.5 million

So, the total liabilities is

= $14 million - $7.5 million

= $6.5 million

Total liabilities = Current liabilities + long term debt

$6.5 million = Current liabilities + $5 million

So, Current liabilities is $1.5 million

Now the net working capital equal to

= $1 million - $1.5 million

= - $0.5 million

7 0

3 years ago

Suppose that we observe two comparable properties that have each sold twice within the past four years. Property A sold 24 month

Elina [12.6K]

Answer:

0.475% per month

Explanation:

value of property A 24 months ago = $500,000

current value of property A = $425,000

total decrease in value = $500,000 - $425,000 = $75,000 or 15%

monthly % decrease:

1.15 = (1 + r)²⁴

²⁴√1.15 = (1 + r)

1.0058 = 1 + r

r = 0.00584 = 0.58% decrease per month

value of property B 48 months ago = $575,000

current value of property A = $465,000

total decrease in value = $575,000 - $465,000 = $110,000 or 19.13%

monthly % decrease:

1.1913= (1 + r)⁴⁸

⁴⁸√1.1913 = (1 + r)

1.0037 = 1 + r

r = 0.0037 = 0.37% decrease per month

if both properties are weighted equally, then the market decrease per month = (0.58% x 1/2) + (0.37% x 1/2) = 0.475% per month

4 0

3 years ago

Match each of the numbered descriptions with the principle or assumption it best reflects. Enter the letter for the appropriate

KatRina [158]

Answer:

1 with G = Revenue Recognition Principle

2 with A = Cost principle

3 with C = Specific Accounting Principle

4 with H = Going concern assumption

5 with D = Full Disclosure Principle

6 with B = Matching Principle

7 with E = General Accounting Principle

8 with F = Business Entity Assumption

Explanation:

Revenue shall be recognised as at the time that their is 100% certain that the risk and reward associated is transferred to the customer. = Revenue Recognition Principle.

Cost Principle assumes to record transactions at its cost and not the market value.

Specific Accounting Principle is made with specific orders for specific industry.

Going concern assumption assumes that the business with continue to an infinite period of time and it will not end.

Full Disclosure principle requires to disclose all the material facts about business whether the effect is currently disclosed in financial statements or not.

Matching principle requires to record expense for each revenue earned.

General Accounting Assumption is old and applicable on all the businesses and industry.

Business Entity Assumptions assumes for business calculations that the owners are different from their business, and both are two separate identities.

3 0

3 years ago

The plant assets section of the comparative balance sheets of Anders Company is reported below.

kobusy [5.1K]

Answer:

Cash Anders received from the sales of equipment was $37,000

Explanation:

The equipment with a book value of $40,000 and an original cost of $210,000 was sold at a loss of $3,000

In Anders Company

The carrying amount of the equipment = book value of equipment = $40,000

The equipment was sold at a loss of $3,000. Therefore:

The carrying amount of the equipment - Sales price (Cash Anders received from the sales) = $3,000

Cash Anders received from the sales = The carrying amount of the equipment - $3,000 = $40,000 - $3,000 = $37,000

8 0

3 years ago