Answer to Question #106541 in Accounting for tom

Question #106541
BIT Bank (in millions) Assets: Reserves $48 Loans $360 Liabilities: Deposits $340 Bank Capital $68 NAT Bank (in millions) Assets Reserves $48 Loans $360 Liabilities Deposits $400 Bank Capital $8 Assume that both BIT Bank and NAT Bank have the same net profit after tax of $8 million
a. Which bank (Bank BIT or Bank NAT) is riskier in case of loan depreciation at $60 million? Explain. Show your calculations to explain your answers.
1
Expert's answer
2020-03-27T10:22:24-0400

с) Bank NAT is riskier in case of loan depreciation at $60 million:lower coverage

"\\frac{300}{400}=0.75" NAT Bank


"\\frac{300}{340}=0.88" BIT Bank




Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS