Answer:
Explanation:
Annnual Interest Income = 60 million * (1+3%) - 7million
= 1.8million
Annual Interest Expense = 70 million * (1+1%) - 70 million
= 0.6 million
Profit = 1.8 million - 0.6 million
= 0.2million
If all interest rates were to rise by 1 percent, that essentially means the spread between Treasury note interest and CD interest remains the same as both the interest rates are increasing by 1 percent equally. Therefore, there won't be any effect on the profit of the bank.
If interest rate rise 1 percent, bank's profit in the second year falls to = 60 million *(3%-2%)
= 0.6 million
Answer:
Firm's cash coverage ratio = 9.64
Explanation:
We know,
Cash coverage ratio = Cash and Cash equivalents ÷ current liabilities
However, as there is no such information regarding cash and cash equivalents and liabilities, we have to use alternative formula,
Firm's cash coverage ratio = (EBIT + Depreciation Expense) ÷ Fixed charges
Given,
EBIT = $400,000
Depreciation Expense = $24,000
Fixed charges = $44,000
Therefore,
Firm's cash coverage ratio = ($400,000 + 24,000) ÷ $44,000
Firm's cash coverage ratio = $424,000 ÷ $44,000
Firm's cash coverage ratio = 9.64
Both the cover letter and résumé
When a company earns income, it becomes larger because net assets have increased. Even if a portion of the profits is later distributed to shareholders as a dividend, the company has grown in size as a result of its own operations.