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

question 54

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.

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Definitions:

Terms

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E-Invoice

An electronic invoice for goods or services that is sent online rather than through traditional physical mail.

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