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:

Foreign Assignments

Work tasks or roles assigned to employees outside their home country, often for an extended period.

Direct Foreign Investment

This refers to the investment by a company or individual in one country in business interests located in another country, often by buying a company in the target country or by expanding operations of an existing business in that country.

Internationalization process

The strategy through which a business expands its operations and presence into international markets.

Operations VP

A high-level executive who oversees the day-to-day operations and ensures they align with organizational goals.