nia to New York, legislative bodies across the United States are considering eliminating or e on noncustomers, who make $14 million in withdrawals from other banks' ATM machines of $24 per hour and pay ATM fees of $3.00 per transaction. It is estimated that banks wou million transactions at $1.00 per transaction, while noncustomers would attempt to condu imates suggest that, for every 1 million gap between the desired and available transaction extra minute traveling to another machine to withdraw cash. information, what would be the nonpecuniary cost of legislation that would place a $1.00 customer transactions?
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From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $10 million in withdrawals from other banks’ ATM machines. On average, noncustomers earn a wage of $20 per hour and pay ATM fees of $3.25 per transaction. It is estimated that banks would be willing to maintain services for 5 million transactions at $0.75 per transaction, while noncustomers would attempt to conduct 21 million transactions at that price. Estimates suggest that, for every 1 million gap between the desired and available transactions, a typical consumer will have to spend an extra minute traveling to another machine to withdraw cash. Based on this information, what would be the nonpecuniary cost of legislation that would place a $0.75 cap on the fees banks can charge for noncustomer transactions? Instructions: Round your answer to the nearest penny (2 decimal places). $ What would be the full economic price of this legislation?
Manasvee S.
From California to New York, Legislative bodies across the united states are considering eliminating or reducing the surcharges that banks impose on non customers, who make $10 million in withdrawals from other banks ATM machines. On average, non customers earn a wage of $22 per hour and pay ATM fees of $3.00 per transaction. It is estimated that banks would be willing to maintain services for 6 million transactions at $1.25 per transaction, while non customers would attempt to conduct 21 million transactions at that price. Estimates suggest that for every 1 million gap between the desired and available transactions, a typical consumer will have to spend an extra minute traveling to another machine to withdraw cash. Based on this information, what would be the non pecuniary cost of legislation that would place a $1.25 cap on the fees banks can charge for non customer transactions? instructions: enter your responses rounded to the nearest penny ( two decimal place) $ ___________What would be the full economic price of this legislation? $ ____________
Akash M.
Northwestern Bank (NB) offers only checking accounts. Customers can write checks and use a network of automated teller machines. NB earns revenue by investing the money deposited. Currently, it averages 4.1 percent annually on its investments of those deposits. Costs are divided into four activities. To compete with larger banks, NB pays depositors 0.3 percent on all deposits. A recent study classified the bank's annual operating activities using the following cost drivers: Activity | Cost Driver | Cost | Driver Volume Using ATM | Number of uses | $ 1,800,000 | 3,000,000 uses Visiting branch | Number of visits | 1,080,000 | 225,000 visits Processing transactions | Number of transactions | 7,920,000 | 120,000,000 transactions Managing functions | Total deposits | 7,200,000 | $ 562,500,000 in deposits Total overhead | | $ 18,000,000 | Data on two representative customers follow: Customer | Emily | Jacob ATM uses | 40 | 130 Branch visits | 5 | 45 Number of transactions | 200 | 520 Average deposit | $ 10,000 | $ 10,000 Required: a. Compute the operating profit for Northwestern Bank. b. Compute the profit from Emily and Jacob, assuming that customer costs are based only on deposits. Interest costs = 0.3 percent of deposits; operating costs are 3.2 percent ($18,000,000/$562,500,000) of deposits. c. Compute the profit from Emily and Jacob, assuming that customer costs are computed using the information in the activity-based costing analysis.
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