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jok3333 [9.3K]
3 years ago
10

Do you think that high excise taxes(taxes on specific goods) on items such as tobacco or alcohol should be used to discourage pe

ople from consuming those items?
Business
1 answer:
pantera1 [17]3 years ago
3 0

<h2>Yes it could be done to discourage people from consuming tobacco or alcohol.</h2>

Explanation:

  • Normally government encourages or discourages use of goods by reducing or increasing the tax on the goods.
  • As everybody aware that the use of tobacco or alcohol consumption damages the body and even might reduce the life span of the consumer.
  • When the taxes are more, people tend to reduce the use of those item and at one point of time, the consumer might stop the usage slowly.
  • This is one way to increase the lifespan of the consumer consuming alcohol or tobacco.
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Calculate the risk-adjusted asset base for a bank with: a. Cash of $20 million, 0% b. Gen. Obligation municipal security of $100
Ulleksa [173]
This is what i found  Answer 1
Risk-Adjusted Asset Base
The calculation of the risk-adjusted asset base for a bank is as below-
Risk-adjusted asset = (Cash × 0%) + (municipal security × 20%) + (home mortgages × 50%) + (Commercial loans × 100%)
= (20 × 0%) + (100 × 20%) + (500 × 50%) + (300$ × 100%)
= 0 + 20 + 250 + 300
= $570 million
The outcome shows that the risk-adjusted or weighted asset based for the bank will be $570 million.
Tier1 and Tier 2 Capital:
If the bank has no off-balance sheet activity then minimum required level of Tier 1 and Tier 2 capital will be-
Tier 1 capital = Risk-weighted asset × 4%
= $570 × 4%
= $22.8 million
Tier 2 capital = Maximum of 1.25% of risk-weighted asset
= $570 × 1.25%
= $7.125 million
Total capital = $22.8 + $7.125 => $29.925 million
The outcomes indicate that the minimum required level of Tier1 and Tier 2 capital is $22.8 million and $7.125 million for the bank.
Bank Comply with Capital Requirements:
If the bank has Tier 1 capital of $25 million and Tier 2 capital of $15 million then it will comply with its capital requirements of $29.925 million. It is because in this situation, total capital of bank is $37 million that is higher than the above calculated capital of $29.925 million.
Impact of off-Balance Sheet Activities on Capital Requirements
The addition of off-balance sheet activities might increase the capital requirement of the bank. It is because an off-balance sheet items is a financial contract that can create credit loss for the company due to credit risk. So, in case of adding off-balance sheet activities, a bank will require more capital to cover credit loss. Along with this, it can also increase the minimum ratio of capital to risk-weighted assets from 8% and in that situation; the bank will need more capital (Carmichael & Graham, 2012).
Answer 2
Probability of Repayment and Risk Premium
A).
If the rate on a one-year treasury bill is 6% and in case of loan default, no payments are expected on financial securities then the probability of repayment and the risk premium on 1 year AA-rated loan yielding 9 percent will be-
Probability of Repayment:
The following formula can be useful to determine probability of repayment.
P = (1 + I) / (1 + k)
Where,
I = 6%
k = 9%
Then, ...you have $2.19 left :D
 
4 0
3 years ago
For businesses that gross in excess of $10 million per year, pro forma amounts are usually ________. rounded to the nearest ten
KatRina [158]

Answer:

rounded to the nearest ten thousand dollars

Explanation:

The term pro forma financial statements refers to a type of financial statement which estimates future financial results. It doesn't follow the GAAP, instead it is designed to focus on specific figures about a company's expected earnings. Although pro forma financials are only expected financial statements, it is still illegal to mislead investors using them.

5 0
3 years ago
Paulson Company began the year with retained earnings of $500,000. During the year, the company issued $720,000 of common stock,
Murljashka [212]

Answer:

Revenue for the period = $2,100,000

Explanation:

Provided information,

Opening balance of retained earnings = $500,000

Expenses recorded for the period = $2,000,000

Dividends paid during the period = $80,000

Closing balance of retained earnings = $520,000

Therefore increase in retained earnings = $520,000 - $500,000 = $20,000

Earnings for the period - Expenses for the period - Dividend for the period = $20,000

Now, putting values in above,

Earnings - $2,000,000 - $80,000 = $20,000

Earnings = $20,000 + $80,000 + $2,000,000 = $2,100,000

Revenue for the period = $2,100,000

6 0
3 years ago
A written promise to pay certain sum of money to another person or company is a
const2013 [10]

Promissory Notes Receivable

5 0
3 years ago
Read 2 more answers
A new machine for harvesting corn will allow rows to be planted only fifteen inches apart, instead of the usual thirty inches. C
Alik [6]

Answer: Option D

Explanation:The optimal spacing for corn seed plant seeds 1.5 to 2 inches deep and 4 to 6 inches apart and rows spacing should be 30 to 36 inches apart. From the above case, the rows spacing is reduced by half which will increase the number of corn plant per acre which would lead to overall more profit from more yield.

Therefore the most appropriate answer to the space given above is option D.

5 0
3 years ago
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