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defon
3 years ago
10

Suppose that as a result of a housing price​ decline, the value of the​ bank's securitized assets falls by an uncertain​ amount,

so that these assets are now worth somewhere between 25 and 45. Call the securitized assets​ "troubled assets." The value of the other assets remains at 50. As a result of the uncertainty about the value of the​ bank's assets, lenders are reluctant to provide any​ short-term credit to the bank.
Business
1 answer:
neonofarm [45]3 years ago
4 0

Answer:

<em>Recapitalization will be a better policy than buying the troubles assets because, buying troubled assets will at most case provide a bank liquidity  but not necessarily a positive capital.</em>

Explanation:

<em>From the question, we recall the following,</em>

<em>The firm has three assets which are 50 of untroubled assets, 25 of troubled assets and 25 of treasury bonds</em>

The Securitized assets will be now 50-25= 25

The value other assets will remain at= 50

The Treasury bonds will be 50-25=25

The Short term credit will remain at= 80

The Capital will be =20  

Securitized assets. 25. Short term credit 80

Other assets.=50 and capital= 20

The Treasury bonds=25

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8 0
3 years ago
Read 2 more answers
Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components dep
brilliants [131]

Answer:

1. Plantwide Overhead Rate $ 220.06 per machine hour

Total Cost per Unit= Model 145 $ 555.96 per unit

Total cost per unit = Model 212 $ 616.94 per unit

Profit (loss)    Model 145  219.04

Loss Model 212  (26.94)

Explanation:

Real Cool

<u>Process Activity               Overhead Cost         Driver         Quantity</u>

<u><em>Components </em></u>

Changeover                      $452,000    Number of batches    750

Machining                             300,200        Machine hours      7,640

<u>Setups                                229,000        Number of setups      40</u>

                                          $981,200

<u><em>Finishing</em></u>  

Welding                         $180,100            Welding hours         3,600

Inspecting                     231,000       Number of inspections    850

<u>Rework                         81,250              Rework orders             210</u>

                                   $472,350

<u><em>Support </em></u>

Purchasing                $136,500           Purchase orders           480

Providing space          30,300          Number of units          4,500

<u>Providing utilities        50,910            Number of units          4,500</u>

                                  $227,710

Additional production information concerning its two product lines follows.

                                        Model 145           Model 212

Units produced                   1,500                  3,000

Welding hours                    1,400                   2,200

Batches                                 375                       375

Number of inspections          610                       340

Machine hours                       2,290                    6,350

Setups                                      20                             20

Rework orders                         80                             130

Purchase orders                    320                            160

We find the plantwide overhead rate by dividing the total overhead with the total machine hours.

1. Plantwide Overhead Rate= Total Factory Overhead/ Total Machine Hours

Plantwide Overhead Rate= $981,200+ $472,350+$227,710/7640

                                       = 1681260/7640= $ 220.06 per machine hour

We multiply the machine hours of each model to get the overhead .

2.  Cost of Model 145

Materials and Labor  = $220 *1500= $330,000

Overhead = $220.06 *2290= $503,937.4

Total Cost = $83,3937.4

Total Cost per Unit= $83,3937.4/1500= $ 555.96 per unit

Cost Of Model 212

Materials and Labor  = $150 *3000= $ 450,000

Overhead = $220.06 *6350= $ 1400,810

Total Cost = $ 1850810

Total cost per unit = $ 1850810/ 3000= $ 616.94 per unit

We find the profit or loss by subtracting the mfg cost from the market value.

3.                                        Model 145          Model 212

Market Price                     $775                     $590

<u>Manufacturing Cost          ($555.96)               ($616.94)</u>

<u>Profit (loss)                          219.04                      (26.94)</u>

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3 years ago
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3 years ago
The san francisco giants sell tickets based on​ ____________, where the prices often change based on demand and other variables.
pychu [463]
The San Francisco Giants sell tickets based on <u>dynamic pricing</u>, <span>where the prices often change based on demand and other variables.
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3 years ago
The substitution effect of an increase in the price of Raisin Bran refers to Select one: a. the decrease in the demand for Raisi
EleoNora [17]

Answer:

the fact that the higher price of Raisin Bran relative to its substitutes, such as Cheerios, causes consumers to buy less Raisin Bran.

Explanation:

the substitution effect arises when as a result of a rise in the price of a good, the good becomes more expensive relative to its substitutes. Consumers not consume less of the good and more of the substitute. This leads to a movement up along the demand curve for that goods and not a movement along the demand curve for the good and not a shift of the demand curve.

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2 years ago
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