In One Sense ________ Appears Surprising Since It Means That

question 102

Multiple Choice

In one sense ________ appears surprising since it means that the bank is not ________ its portfolio of loans and thus is exposing itself to more risk.

• A)specialization in lending;diversifying
• B)specialization in lending;rationing
• C)credit rationing;diversifying
• D)screening;rationing

Determine how depreciation affects annual cash inflow calculations.

Perform incremental analysis for making financial decisions between different plans.

Identify and differentiate various types of costs, including sunk, incremental, opportunity, and variable costs.

Evaluate make-or-buy decisions considering opportunity costs and total cost implications.

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Definitions:

Return

The income produced by an investment, typically expressed as a percentage of the investment’s cost.

Total Assets

The sum of all assets owned by a company, including cash, investments, equipment, and real estate.

Profitability

A measure of how efficiently a company or project generates profit in relation to its revenue or investments.

Times Interest Earned

A financial ratio that measures a company’s ability to meet its debt obligations, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.