Question

In: Finance

Kwadwo Balkana is a big time business tycoon who is into spare parts business. He has...

Kwadwo Balkana is a big time business tycoon who is into spare parts business. He has ten shops in Abosey- Okai, five shops in Kokompe and ten shops in Kumasi Magazine. His total daily sales from all his shops in Ghana is GH50,000. Kwadwo Balkana for so many years, was keeping his money in his home until he suffered an armed robbery attack and a friend advised him to open a bank account for his business. He heeded to the advice and went to open an account with Standard Chartered Bank, Osu branch. The first day he went to the bank for the account opening, he deposited GH200,000 into his account. Two months after being a customer of Stand Chart, a friend of his’ needed money for some business transactions. He told the friend, who wasn’t a customer of Stand Chart, to go to Stand Chart Osu branch in his name for a loan. When the friend arrived at the bank, he was informed that he needed to be a customer by account opening before they could advance a loan to him. The friend told Kwadwo Balkana and he went with him to the bank. Kwadwo Balkana told the bank upon arrival that they should give a loan to his friend. The bank explained why they could not advance a loan to his friend but Kwadwo still insisted that they should give part of the money he has deposited to his friend as a loan. The bank refused and Kwadwo became furious and threatened to close his account with the bank. The bank did not want to lose him as a client so the branch manager explained to him that once he deposits his money with the bank, the bank now becomes responsible for the money. They decide what to do with the money and not the customer. Kwadwo told the manager that once he has given his money to them, he has the right to dictate to them what to do with his money. Is Kwadwo Balkana right on this?
Required
Advise Kwadwo Balkana on the legal position of this matter.

Solutions

Expert Solution

Kwadwo Balkana is not legally right by saying that once he has given his money to the bank, he has the right to dictate to them what to do with his money. Yes ofcourse, he can use his money or expend it as and when required but he cannot ask the bank to give loan to his friend or anyone from the money he has deposited. He can withdraw it from the bank and then he can lend the money to his friend or anyone but he cannot involve the bank to give the loan to someone from his money. The bank by saying that "once he deposits his money with the bank, the bank now becomes responsible for the money" is true in the sense that now bank will be accountable for the money he has deposited and so the bank has to follow the banking rules and regulations to offer a loan.

So to conclude, we can say that Kwadwo Balkana can legally withdraw his money and give loan but he cannot ask the bank to give loan to his friend out of his money deposited in the bank.


Related Solutions

Kwadwo Balkana is a big time business tycoon who is into spare parts business. He has...
Kwadwo Balkana is a big time business tycoon who is into spare parts business. He has ten shops in Abosey- Okai, five shops in Kokompe and ten shops in Kumasi Magazine. His total daily sales from all his shops in Ghana is GH50,000. Kwadwo Balkana for so many years, was keeping his money in his home until he suffered an armed robbery attack and a friend advised him to open a bank account for his business. He heeded to the...
Daniel is a scientific chemist. In his spare time, he has been trying to grow a...
Daniel is a scientific chemist. In his spare time, he has been trying to grow a vegetable garden. One evening after work, Daniel buries some organic chemical waste in his backyard. Within weeks, his garden is overgrown with vegetables. Daniel is particularly proud of his pumpkin crop, which has produced exceptionally sweet pumpkins. He claims that the sweetness comes from pouring honey in the soil around the pumpkins every morning. Further experiments indicate that a particular mixture of chemicals stimulates...
Otto’s brotherDent runs an auto repair business. In his spare time, he calculated his total cost function.
Otto’s brotherDent runs an auto repair business. In his spare time, he calculated his total cost function. He found that the total cost of repairing cars is:TC = 2s2+ 10where sis the number of cars repaired. Write down equations for Dent’s:i) total fixed cost.ii) total variable cost.iii) average variable cost.iv) average fixed cost.v) average total cost.vi) marginal cost functions.
Thor Ltd, a supplier of motor vehicle spare parts, agreed to acquire the business of a...
Thor Ltd, a supplier of motor vehicle spare parts, agreed to acquire the business of a rival company, Loki Ltd, taking over all assets and liabilities as at 1 May 2021. The consideration was payable by the issue of 10 000 shares in Thor Ltd with a fair value of $1 each and the balance by transfer of the share portfolio held by Thor Ltd. The share portfolio had a fair value as at 1 May 2021 of $75 000....
Ebenezer Scrooge, in his spare time, happens to be an intelligent and data-driven economist. He tells...
Ebenezer Scrooge, in his spare time, happens to be an intelligent and data-driven economist. He tells you he doesn’t believe in the value of behavioral economic concepts because he’s seen neither data to support them nor real-life, high-stakes examples of their consequences. For each of the following concepts, explain to Ebenezer what sort of experimental or field data could support the need for a behavioral model. (These data can be the result of a hypothetical experiment, the existence of a...
Assume that an investor has a manufacturing plant that produces automotive spare parts. The sale price...
Assume that an investor has a manufacturing plant that produces automotive spare parts. The sale price of the part is 18 $/unit. The annual fixed cost of the plant is $1,500,000. Unit variable labor cost is 4 $/unit, unit variable material cost 3 $/unit, unit variable overhead cost 1 $/unit. a )How many units should be produced to start making profit (X)? b) How many units should be produced to make $1000,000 profit (Y)? a. X= 200000, Y= 325000 b....
Aftron is a very famous US company producing auto spare parts. They produce parts on large...
Aftron is a very famous US company producing auto spare parts. They produce parts on large scale and sells all over the country. Most of the US car manufacturing industries place orders with them in advance for the various auto parts. For these advance bookings, companies make payments for the pre booking of delivery of parts. Aftron are known for their efficiency and reliability among the business communities. One-day news breaks out for the default of Aftron. The news turned...
Aftron is a very famous US company producing auto spare parts. They produce parts on large...
Aftron is a very famous US company producing auto spare parts. They produce parts on large scale and sells all over the country. Most of the US car manufacturing industries place orders with them in advance for the various auto parts. For these advance bookings, companies make payments for the pre booking of delivery of parts. Aftron are known for their efficiency and reliability among the business communities. One-day news breaks out for the default of Aftron. The news turned...
Sharp Aerospace has a five-year contract to supply North Plane with four specific spare parts for...
Sharp Aerospace has a five-year contract to supply North Plane with four specific spare parts for its fleet of airplanes. The following table provides information on selling prices, costs, and the number of units of each part that the company needs to produce annually according to the contract with North Plane: A10 A20 A30 A40 Sales $1,500,000 $875,000 $450,000 $2,400,000 Variable costs $1,235,000 $425,000 $187,000 $1,875,000 Contribution margin $265,000 $450,000 $263,000 $525,000 Production in units 1,000 250 750 600 Machine...
Sharp Aerospace has a five-year contract to supply North Plane with four specific spare parts for...
Sharp Aerospace has a five-year contract to supply North Plane with four specific spare parts for its fleet of airplanes. The following table provides information on selling prices, costs, and the number of units of each part that the company needs to produce annually according to the contract with North Plane: A10 A20 A30 A40 Sales $1,500,000 $875,000 $450,000 $2,400,000 Variable costs $1,235,000 $425,000 $187,000 $1,875,000 Contribution margin $265,000 $450,000 $263,000 $525,000 Production in units 1,000 250 750 600 Machine...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT