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earnstyle [38]
3 years ago
10

Suppose that a bank has loaned money to two businesses: a trustworthy computer manufacturer and a risky mining venture. Unfortun

ately, the mining venture fails, and the mining firm goes bankrupt. The bank has no insurance for this situation. Now, on its balance sheet, the bank has more liabilities than assets. What is this situation called, and what is the result of this situation? Bank run. Depositors run on the bank to cash out before the bank runs out of money. Illiquidity. Shares of the bank are not traded as often on a stock exchange. Fire sale. The available assets of the bank are sold for pennies on the dollar. Insolvency. The bank cannot pay back depositors. Consumption. The money that was lost has no effect on the bank's operating status, but the firm's loss counts as part of GDP.
Business
1 answer:
SVETLANKA909090 [29]3 years ago
8 0

Answer:

The situation is called insolvency. insolvency is refer to the situation when debtor is unable return its debt.  The same is happened in the given situation. In the above case due to not paid by manufacturing unit, bank is unable to pay to depositor.

Insolvency is refer to that critical condition when debtor unable to pay amount to depositor. In the above given case even if bank want to sell its all assets it cannot cover its liabilities.Explanation:

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When a company exchanges 200 shares of stock worth $20 each for 100 shares worth $40 each, they are using?
Stels [109]
When a company exchanges 200 shares of stock worth $20 each for 100 shares worth $40 each, they are using reverse stock split. 
A reverse stock split is a corporate action in which a firm or a company reduces the number of shares it has outstanding by a set multiple. For example, if a company announces a reverse stock split of 1:50, this means that once the split occurs investors will receive one share for every 100 shares they own.
6 0
3 years ago
A subsidiary ledger:(A) used in place of the general ledger if the general ledger is destroyed or stolen.(B) a group of accounts
gayaneshka [121]

Answer:

The correct option is C

Explanation:

Subsidiary ledger are those kind of the ledger which is stated as the group of the similar or common accounts, whose combined balances are equal to the balance in the particular account of general ledger.

The general ledger is the account that summarizes or provide detailed information of the account balances of the subsidiary ledger is recognized as the control account or the master account.

The subsidiary ledger are those group of accounts which have a similar characteristic and provide summarized information regarding the control account.

3 0
3 years ago
Tom Gettback buys 100 shares of Jobnson Walker stock for $87.00. per share and a 3-mont Johnson Walker put option with an exerci
Bad White [126]

Answer:

b. $200 loss is the correct option

Explanation:

=100*(105-87)+(MAX(105-105,0)-20)*100

=-200

7 0
3 years ago
Stech Co. is issuing $9 million 12% bonds in a private placement on July 1, 2017. Each $1,000 bond pays interest semi-annually o
STALIN [3.7K]

Answer:

Expected selling price =$ 1,271.81

Explanation:

<em>The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.</em>

<em>These cash flows include interest payment and redemption value</em>

The price of the bond can be calculated as follows:

Step 1

<em>PV of interest payment</em>

coupon rate - 12%, yield - 8%, years to maturity- 10 years

Semi-annual coupon rate = 12%/2 = 6%

Semi-annual Interest payment =( 6%×$1000)= $60

Semi annual yield = 8%/2 = 4%

PV of interest payment

= A ×(1- (1+r)^(-n))/r

A- interest payment, r- yield - 4%, n- no of periods- 2 × 10 = 20periods

= 60× (1-(1.04)^(-10×2))/0.04)

= 60× 13.59032634

=$815.41

Step 2

<em>PV of redemption value (RV)</em>

PV = RV × (1+r)^(-n)

RV - redemption value- $1000, n- 2×10 r- 4%

= 1,000 × (1+0.04)^(-2×10)

= $456.38

Step 3

<em>Price of bond = PV of interest payment + PV of RV</em>

= $815.41 + $456.38

= $ 1,271.81

Expected selling price =$ 1,271.81

5 0
3 years ago
The Assembly Department of One Roof, Inc., manufacturer of computers, incurred $300,000 in direct material costs and $70,000 in
Papessa [141]

Answer:

D) $116.67 per EUP

Explanation:

To find out the equivalent unit of production (EUP) for conversion costs we have to divide the total conversion costs by the equivalent units produced:

EUP conversion costs = $70,000 / 600 units = $116.67 per EUP

The EUP for direct materials would = total costs direct materials / equivalent units produced = $300,000 / 1,000 units = $300 per EUP

Both fully completed units and partially completed units are expressed in terms of equivalent units of production.

6 0
3 years ago
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