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2 years ago

Use the information presented in Northeastern Mutual Bank's balance sheet to answer the following questions.

Business

1 answer:

Nana76 [90]2 years ago

4 0

Answer:

The explanation is given as follows.

Explanation:

Task 1:

The higher the percentage of assets a bank holds as loans, the higher the capital requirement.

When the owners of the bank borrow $100 to supplement their existing reserves , both reserves and debt increase by $100 , therefore increase in debt as in any balance sheet , the total value of accounts on the left hand should be equal to the right hand , so when there is increase in reserves , there will be increase in debt.

Task 2:

It specifies a minimum leverage ratio for all banks

leverage ratio initially = total assets / capital = 1750 / 125 = 14

leverage ratio new value = total assets / capital = 1850 / 125 = 14.8 ( the assets increase by $100 with increase in reserves)

Task 3

Its intended goal is to protect the interests of those who hold equity in the bank.

Capital requirement are there to ensure that bank have enough capital to repay the depositors and debtors and if a bank holds a higher percent of risky assets , capital requirements will be higher so that the bank remains solvent hence option a is right answer.

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John, Lesa, and Trevor form a limited liability company. John contributes 60 percent of the capital, and Lesa and Trevor each co

lianna [129]

Answer: State Law.

Explanation:

This dispute falls under the jurisdiction of state law and so that is what the court will use. This is unless the company established a profit-sharing agreement as per the Uniform Limited Liability Company Act (ULLCA) and the state that they are in is one of the 19 states and District that enacted the UCCLA.

As the company never established a profit agreement principle, this falls under State law which normally calls for the division of profits equally amongst partners.

5 0

1 year ago

The rates of return on Cherry Jalopies, Inc., stock over the last five years were 22 percent, 11 percent, −4 percent, 6 percent,

cupoosta [38]

Answer:

Cherry Jalopies, Inc.:

mean = (0.22 + 0.11 - 0.04 + 0.06 + 0.09) / 5 = 0.52 / 5 = 0.104

variance = [(0.22 - 0.104)² + (0.11 - 0.104)² + (-0.04 - 0.104)² + (0.06 - 0.104)² + (0.09 - 0.104)²] / 5 = (0.013456 + 0.000036 + 0.020736 + 0.001936 + 0.000196) / 5 = 0.007272

standard deviation = √0.007272 = 0.085276 = 8.53%

Straw Construction Company:

mean = (0.16 + 0.23 - 0.01 + 0.01 + 0.17) / 5 = 0.56 / 5 = 0.112

variance = [(0.16 - 0.112)² + (0.23 - 0.112)² + (-0.01 - 0.112)² + (0.01 - 0.112)² + (0.17 - 0.112)²] / 5 = (0.002304 + 0.013924 + 0.014884 + 0.010404 + 0.003364) / 5 = 0.008976

standard deviation = √0.008976 = 0.09474 = 9.47%

5 0

2 years ago

Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A

melomori [17]

Answer:

1. ROI for each division:

Division A Division B Division C

Return on investment (DuPont) = 23% 7% 11.6%

2. Residual income (loss) $469,500 ($106,950) $0

3. Divisions A and C will probably accept the opportunity while Division B will reject it.

Explanation:

a) Data and Calculations:

Division A Division B Division C

Sales $ 15,650,000 $ 35,650,000 $ 20,520,000

Average operating assets $ 3,130,000 $ 7,130,000 $ 5,130,000

Net operating income $ 719,900 $ 499,100 $ 595,080

Minimum required rate of return 8.00 % 8.50 % 11.60 %

Return on investment (ROI) (ordinary) 23% 7% 11.6%

ROI = Net operating income/Average operating assets * 100

Return on investment (DuPont ROI) :

Asset Turnover = 5 5 4

Sales/Average operating assets

Operating income margin =

Income/Sales * 100 4.6% 1.4% 2.9%

Return on investment (DuPont) = 23% 7% 11.6%

Asset Turnover * Operating income margin

Residual income =

Net income - (Equity * RRR) $469,500 ($106,950) $0

NB: Equity is approximated to the net operating asset here.

7 0

1 year ago

On April 2, Kelvin sold $40,000 of inventory items on credit with the terms 1/10, net 30. Payment on $24,000 sales was received

motikmotik

Answer:

Explanation:

The journal entry is shown below:

1. Accounts receivable A/c Dr $160

To Sales discounts forfeited $160

(Being sales discount is recorded)

The computation of the sales discount is shown below:

= (Sales value - payment made) × discount rate

= ($40,000 - $24,000) × 1%

= $160

2. Cash A/c Dr $16,000

To Accounts receivable A/c $16,000

(Being cash is received)

4 0

2 years ago

Production Processes Manufacturers use several different production processes to create goods and services. This activity is imp

iragen [17]

Answer:

Refining crude oil into gasoline requires the use of chemicals, pressure, and heat to change the chemical makeup of the crude oil into a finished product of gasoline. PROCESS MANUFACTURING: deals with formulas and manufacturing recipes.

A production plant that serves as a point where workers and robotics bring together all of the components that create automobiles. ASSEMBLY PROCESS: manufactured units follow an assembly line.

Making steel is a process that cannot be easily stopped and restarted. CONTINUOUS PROCESS: the manufacturing process cannot be easily stopped.

Allen-Bradley builds motor starters. The machines that Allen-Bradley uses can make different types of starters without slowing down the process. FLEXIBLE MANUFACTURING: different models can be manufactured in the same process.

A tractor manufacturer looked at their production techniques and eliminated the activities in production that do not add value to the consumer. LEAN MANUFACTURING: very simple and lean manufacturing process.

A bicycle company makes 18 models in more than 2 million combinations. The customer chooses the model, size, color, and design. MASS CUSTOMIZATION: high degree of product customization.

8 0

2 years ago