The Basic Weakness of the Cost-Plus Loan Pricing Method Is

question 100

True/False

The basic weakness of the cost-plus loan pricing method is that it gives little regard to the competition from other lenders while setting the loan price.

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Definitions:

Unrealized Increase/Decrease

Change in the market value of assets that have not been sold, impacting a company's financial statements in terms of valuation but not cash flow.

Market Value

The existing value at which an asset or service might be traded in a commercial environment.

Available-For-Sale

A classification of financial assets indicating that they are not held for trading or long-term investment purposes, and their value can be adjusted based on market valuations.