Assuming that the federal reserve banks sell $40 million in government securities to commercial banks and the reserve ratio is 2
1 answer:
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Answer:
18.29%
Explanation:
Return on Equity is the net profit available for equity/ Total equity value.
Total equity = Total assets - Total debt
= $90 million - $55 million = $35 million
Earnings for equity = Annual sales net profit margin 4%
= $160 million 4% = 6.4 million
Therefore, return on equity =
=
Therefore, ROE = 18.29%
Answer:
The boat today is worth 100,440 dollars
Explanation:
We need to solve for the present value of the payment Fishermen's Corp will receive for the boat:
We will apply the formula for lump sum to each
cash flow and then add them together
Year Nominal Present Value
1 20000 18, 518
2 40000 34,293
3 60000 47,630
TOTAL 100,441