1. Tier I capital is $60 million; Tier II capital is $55 million; book value of assets is $2 billion; and risk-adjusted assets totals $1.85 billion. What is the regulatory defined capital zone for this bank?

A) well capitalize

B) adequately capitalized

C) undercapitalized

D) significantly undercapitalized

E) critically undercapitalized

2. Alfonso and sons purchased a new grinding machine 2 years ago at cost of $390,000. last year, some revolutionary development occured making their machine vitually worthless as it cannot produce products which mean the higher quality of the newer machines. of Alfonso and sons continuse using their current machine, they will lose their customers. they have not found anyone willing to purchase the machine ever at a depply discounted price. the best description of this machine today is that it is a(n)________ cost.

a. erosion

b. rationed

c. sunk

d. market

e. opportunity