What is the bank before tax cost of funds

Assignment Help Financial Management

Reference no: EM131907453

1. A bank has $500 million in checking deposits with interest and noninterest costs of 6%, $250 million in savings and time deposits with interest and non-interest costs of 14%, and $250 million in equity capital with a cost of 25%. The bank has estimated that reserve requirements, deposit insurance fees and uncollected balances reduce the amount og money avaiable on checkign deposits by 15% and on savings and time deposits by 4%. What is the bank's before tax cost of funds?

PLEASE SHOW WORKING

a. 14.65%

b.15.00%

c.15.74%

d. 13.29%

e. 12.75%.

2. Which of the following statements is CORRECT?

a. One drawback of the payback method is that this method does not consider cash flows that occur beyond the payback period. b. If a project's payback is a positive number, then the project should be accepted because it must have a positive NPV. c. The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem. d. The shorter a project's payback period, the less desirable the project is normally considered to be by this criterion.

Reference no: EM131907453

Questions Cloud

Should the motions be granted : Tommy Transmitter planned to burglarize a local audio/ video dealer. On the night he intended to commit the burglary, Tommy was observed standing in an alley.

Search the defendant closets in the bedroom : Assume that officers have a valid search warrant for the defendant's apartment. The warrant specifies that the officers may search for stolen stereos.

Retain their wealth without government interference : Should the estate tax be abolished forever, permitting families of successful, wealthy individuals to retain their wealth without government interference?

Report on analysis of the potential success of company : For this assignment, you will research a company and produce a report on your analysis of the potential success of that company

What is the bank before tax cost of funds : A bank has $500 million in checking deposits with interest and noninterest costs of 6%, What is the bank's before tax cost of funds?

Discuss search warrant for the defendant apartment : Assume that officers have a valid search warrant for the defendant's apartment. The warrant specifies that the officers may search for stolen stereos.

Define exclusionary rule under the fourth amendment : Do you believe that the exclusionary rule is required under the Fourth Amendment? Can you think of any alternatives to the rule?

What is the project discounted payback : What is the project's discounted payback (rounded to two decimal places)?

Which challenge is bad for the defendant : There are two kinds of challenges the prosecutor and the defense lawyer can use when selecting a jury. How do these challenges differ?

User Account

All Pages