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Question
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.
Bank B plans to acquire Bank A and in the process cut costs by $100,000. What is the combined bank's average costs?
A. 12.00 percent.
B. 12.67 percent.
C. 13.00 percent.
D. 13.33 percent.
E. 15.00 percent.
Answer
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