16-116 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.
E)$300,000.

Question

Quizplus · Accepted Answer

The question states that in order to stay competitive in the local market, the operating costs of the combined entity (Bank A + Bank B) need to be reduced. However, there is no information provided about the current operating costs of Bank A and Bank B separately or combined. Therefore, the only logical choice is to select the option that offers the largest reduction in operating costs, which is $500,000.

16-116 by How Much Should Operating Costs of the Combined