The Following Information Is Available on the Average Costs of the Three

question 40

Multiple Choice

The following information is available on the average costs of the three major banks in a given local market.Bank A has assets of $10 million and average costs are 15 percent, Bank B has assets of $20 million and average costs of 13 percent while Bank C has assets of $30 million with average costs of 12 percent.Average costs are measured as a proportion of total assets. By how much should operating costs of the combined entity (Bank A + Bank B) be reduced in order to stay competitive in the local market, ceteris paribus?

• A)$900,000.
• B)$600,000.
• C)$500,000.
• D)$400,000.
• E)$300,000.

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Definitions:

Left Ventricular Pressure

The pressure generated in the left ventricle of the heart during its contraction.

Aortic Semilunar Valve

A valve located between the left ventricle of the heart and the aorta that prevents backflow of blood into the heart during the heart's relaxation phase.

AV Valves

Atrioventricular valves, located between the atria and ventricles in the heart, prevent backflow of blood.

Aorta

The main artery in the human body, originating from the left ventricle of the heart and extending down to the abdomen, where it splits into two smaller arteries.