If FNBNA Is Expecting a $20 Million Net Deposit Drain

question 6

Multiple Choice

If FNBNA is expecting a $20 million net deposit drain and the bank wishes to fund the drain by borrowing more money,how much will pretax net income change if the borrowing cost is the same as on its existing borrowed funds?

• A)$600,000
• B)−$312,000
• C)−$2,000,000
• D)−$600,000
• E)$312,000

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Definitions:

Line Extension

The process of introducing new items in the same product category under the same brand name, often with new flavors, sizes, colors, or ingredients.

Multi-brand

A strategy where a company markets multiple brands within the same product category, offering diversity to consumers.

Private-label Brand

A brand owned by a retailer or supplier that is not manufactured by them but is sold under their own branding.

National Brand

A product or service that is widely recognized and available across a country, often produced by a company that invests in national marketing campaigns.