The Table Below Shows the Balance Sheet of Eubank

question 97

Multiple Choice

The table below shows the balance sheet of Eubank.If the interest rate on loans is 10 percent,the annual cost to Eubank of holding excess reserves is:​ ​
Table 14.1
​
EUBANK

• A)10 percent of $500,000.
• B)10 percent of net worth.
• C)10 percent of excess reserves.
• D)$10,000.
• E)0.

---

Definitions:

Basis

The amount of investment in property for tax purposes; used to determine the gain or loss on the sale, exchange, or disposal of the property.

Taxable Gain

The profit arising from the sale or exchange of an asset that is subject to income tax.

Charitable Contribution

Donations made to qualified organizations that may be tax-deductible for the donor.

Taxable Income

The amount of income that is subject to tax, after accounting for deductions and exemptions.