Solution Library


Calculate Sources Of Liquidity, Uses Of Liquidity And Net Liquidity For A Company

Question An FI has $5 million in cash reserves with the Fed in excess of its reserve requirements, $5 million in T-Bills, and a credit line of $10 million to borrow in the repo market. It currently has lent $2 million in the Fed Funds market and borrowed $1 million from the Federal discount window ... Read More

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Calculate Average Implicit Interest Rate And Gross Interest Return Calculation

Question1. What is the average implicit interest rate on a $100,000 account if the bank's average management costs are $2,500 and annual fees average $1,750?    a.    4.25 percent.    b.    2.50 percent.    c.   &nb ... Read More

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Calculate Average Implicit Interest Rate And Gross Interest Return Calculation

QuestionThe following demand deposits and cash reserves at the Fed have been documented by a bank for the computation of reserve requirements (in millions). Reserves are vault cash and reserves at the Fed.   Monday Tuesday Wednesday Thursday Friday &nb ... Read More

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Calculate Average Return Interest Earned From A Bank Account

QuestionA NOW account requires a minimum balance of $500 if annual interest of 5 percent is to be earned monthly on its deposits. An account holder has maintained an average balance of $300 for the first nine months of the year and $800 for the last three months of the year. She has written an avera ... Read More

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A Failed Bank Recovery Of Insured and Uninsured Deposits

QuestionThe following market value balance sheet of a failed bank ($ millions) Assets $400 Insured Deposits $200     Uninsured Deposits $100 1. What is the market value of capital?    a.    $200 million. ... Read More

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Bank To Write Off Bad Loans By Liquidation

QuestionAs a result of loan write-offs, Bank A has to be liquidated by the regulators. The book value of the assets and liabilities of the bank is presented below (in millions of dollars). The market value of the loans has been estimated at $240 million. Loans (book value) $340 In ... Read More

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Calculate Demand Function, Transfer Price and Number of Units To Be Produced

QuestionA firm has two semi-autonomous divisions: production and marketing.  The production division manufactures a product that is purchased and then resold by the marketing division.  The marginal cost functions for the production division and for the value added by the marketing divisio ... Read More

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Calculate The Unit Cost of Computers

QuestionStudents are willing to pay $700 for a computer and $100 for additional software.  Workers are willing to pay $500 for a computer and $200 on the additional software. If the unit cost for computers is $200 and the unit cost for the additional software is $50a)    If there ... Read More

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Splitting Dividend Between Common and Preferred Stockholders

QuestionSaratoga Group has the following items in their current balance sheet:Common Stock 1,500,000 shares authorized, 200,000 issued                $1,600,000Capital Surplus on Common Stock     &nbs ... Read More

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Calculation Of Depreciation Of Machinery

Question Snappy Supply Inc. has purchased several expensive machines for the express purpose of manufacturing nano-chip products. Snappy Supply is a January 1 to December 31 calendar year company so please keep this in mind as you proceed through this problem.1]    Equipment #1: Purc ... Read More

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Calculation of Free Cash Flow From Balance Sheet And Income Statements

QuestionUse the financial statements for Widget Corp and find the FCF. Balance Sheets Widget Corp. (In Millions of Dollars) (Winter 2013) Assets 2013 2012 Liabilities and Equity 2013 2012 Cash $100 $80 Accounts Payable $50 $40 ... Read More

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Calculation of Marginal Cost of Debt For Raising Bonds

QuestionSeven years ago ABC Inc. issued a series of $1,000 bonds (i.e. Par = $1,000) @ 10% compounded semiannually for a term of 30 years.  Additionally, the bonds are callable with a call premium of two coupon payments.  Today, the market rate is 10% and each single bond is trading for $8 ... Read More

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