Problem #4 (Commercial Banking) Megalopolis Bank has the following balance sheet and income statement: Assets Cash and due from banks Investment securities Repurchase agreements Loans Fixed assets Other assets Total assets Balance Sheet (in millions) Liabilities and Equity $ 9,000 Demand deposits 23,000 NOW accounts 42,000 Retail CDs 90,000 Debentures 15,000 Total liabilities 4,000 Common stock $183.000 Paid in capital Retained earnings Total liabilities and equity $ 19,000 89,000 28,000 19.000 $155,000 12,000 4,000 12,000 $183,000 Income Statement Interest on fees and loans Interest on investment securities Interest on repurchase agreements Interest on deposits in banks Total interest income Interest on deposits Interest on debentures Total interest expense Operating income Provision for loan losses Other income Other expenses Income before taxes Taxes Net income $ 9,000 4,000 6,000 1,000 $20,000 9,000 2,000 $11,000 $ 9,000 2,000 2,000 1,000 $ 8,000 3,000 $ 5,000 (a) Calculate Megalopolis Bank's return on equity. (b) Calculate Megalopolis Bank's equity multiplier. (c) Calculate Megalopolis Bank's profit margin. (d) Calculate Megalopolis Bank's provision for loan loss ratio (e) Calculate Megalopolis Bank's noninterest expense ratio. (f) Calculate Megalopolis Bank's tax ratio