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As a result of loan write-offs, Bank A has to be liquidated by the regulators. The book value of the assets and liabilities of the bank is presented below (in millions of dollars) . The market value of the loans has been estimated at $240 million. What is the cost to the insured depositors if the insured depositor transfer resolution method is used by the regulators to resolve the bank failure?
Economic Costs
The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).
Accounting Costs
Explicit costs involving monetary payment or outlay by an organization or individual for goods or services.
Economic Profit
The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.
Accounting Profit
The total revenue of a firm minus the explicit costs directly associated with its operation, such as materials and labor, calculated according to standard accounting practices.
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