Identify whether you should use an average cost of bank funds or a marginal cost of funds in the following situations.
a. Setting the rate on a new loan
b. Evaluating the profitability of a long standing customer’s relationship
c. Calculating the bank’s income tax liability
d. Deciding whether to build a new building or refurbish the old one
e. Deciding whether to advertise the bank’s jumbo CDs or borrow funds in the Eurodollar market