1. A bank has determined the information below for one of its customers. This customer wants to borrow $1,000,000 but will maintain an average deposit balance in its account of $200,000. What is the expected net rate of return on this loan?

A. 10.00 percent 

B. 8.20 percent 

C. 10.25 percent 

D. 13.75 percent

2. Hager Smith, a customer of Standard Bank, maintains an average balance of $420,000. The float from uncollected funds from his balance, accounts for $21,000. The applicable legal reserve requirement at this checking account is 10 percent. Determine Smith's net usable funds.

A. $359,100 

B. $396,900 

C. $378,000 

D. $399,000

 

3. A firm submits their financial records to a bank. Upon examination, the bank discovers that this firm has $500 in cash, $2,500 in accounts receivables, $1,000 in inventory, $5,000 in plant and equipment, and that their assets totaled $9,000. In addition, this bank discovered that the firm had $2,000 in current liabilities, $2,500 in long-term debt, and $4,500 in net worth. Finally, this bank discovered that this firm had $20,000 in net sales and $2,000 in net income. What is this firm's net profit margin?

A. 10.00 percent 

B. 22.22 percent 

C. 44.44 percent 

D. 50.00 percent

Answer rating: 100% (QA)

ANSWERS QUESTION 1 A is the correct answer 1000 percent The average balance is the balance on a loan ... View the full answer