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2 years ago

In a fractional-reserve banking system, an increase in reserve requirements

Business

1 answer:

lidiya [134]2 years ago

8 0

Answer:

B. Decreases both the money multiplier and the money supply

Explanation:

An increase in reserve requirement decreases the amount of excess reserves in the banking system. This decrease means that there will also be less money for banks to loan out. this will lead to a reduction in money supply. The money multiplier on the other hand is the how a small deposit can result in a greater increase in money supply in the economy. Money multiplier will also decrease in this case. This is how;

Money multiplier = 1 / reserve requirement .

Based on above equation, if reserve requirement goes up, the overall; fraction will be smaller hence a decrease in money multiplier.

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The marginal principle of retained earnings means that each potential project to be financed by retained earnings must:

Sedaia [141]

Answer:

The correct answer is D

Explanation:

Marginal principle is the principle which is referred to an increase in the activity level when the marginal advantage exceeds or more than the marginal cost.

So, the marginal principle of retained earnings would be when it will provide the higher rate of return than the shareholders who could achieve after paying taxes on the dividends.

3 0

3 years ago

2. Below are mixed SWOT factors of KFC case study. Fill the chart to Identify each SWOT factor. (2points each)

Ludmilka [50]

Answer:

Strengths :

1. With over 15,000 establishments in 120 countries, KFC is an internationally recognized venue.

2. Alongside KFC, Taco Bell and Pizza Hut also share the same corporate owner brands. Brands have the influence, power, and resources to improve KFC as a restaurant.

3. KFC became popular thanks to its good chicken

Weaknesses :

1. Serving high-fat foods; considering how health-conscious the public is these days, greasy chicken is not going to cut it anymore.

2. KFC follows a franchise management system, meaning each one is individually managed. It is not uncommon for one KFC to have high reviews while another, just down the street, is collecting bad press.

Opportunities :

1. By maintaining the same price point with new menu options, KFC is positioned to enter a new market without sacrificing the beloved chicken-focused meals

2. KFC is in the prime spot to dive into the vegetarian market. Adding new vegetarian options will improve the relationship between KFC and health-conscious and vegetarian consumers

3. Introduce new products fish and deals menu that will attract more customers.

Threats :

1. Increasing numbers of competitors.

2. Raw material prices are rising.

3 0

2 years ago

A written representation from a client’s management that, among other matters, acknowledges responsibility for the fair presenta

7nadin3 [17]

Answer:

The answer is Chief Executive Officer and and the Chief Financial Officer

Explanation:

As part of the requirements for audit process, the external auditor will obtain from the management a written representation for the financial statements being presented to the external auditor. The management is responsible for the preparation of Financial statement and the external auditor expresses their opinions on it.

To show accountability, The Chief Executive Officer and the Chief Financial Officer both sign on it.

6 0

2 years ago

Your company is considering purchasing a machine for $270,000. This machine will bring revenues of $100,000 in the second year,

kumpel [21]

Answer:

Yes we should go with this project because it has a positive NPV of $4,350

Explanation:

We need to calculate the net present value of the machine to decide whether to invest in the machine or not.

As per Given Data

Costs $270,000

Cash Inflows

Year 2 $100,000

Year 3 $150,000

Year 4 $75,000

Interest Rate = 6%

Net Present Value

As we know Net Present value is calculated by discounting each years cash flows using using the Weighted Average cost of Capital.

Year Cash Inflows Discount factor 13% Present values

Year 0 $(270,000) (1+6%)^-0 $(270,000)

Year 2 $100,000 (1+6%)^-2 $89,000

Year 3 $150,000 (1+6%)^-3 $125,943

Year 4 $75,000 (1+6%)^-4 <u>$59,407 </u>

Net present value <u>$4,350 </u>

7 0

3 years ago

LO 7.2Rehydrator makes a nutrition additive and expects to sell 3,000 units in January, 2,000 in February, 2,500 in March, 2,700

iogann1982 [59]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Sales in units:

January= 3,000

February= 2,000

March= 2,500

April= 2,700

May= 2,900

The required ending inventory is 20% of the next month's sales, and the beginning inventory on January 1 was 600 units.

The production budget for each month is calculated using the following formula:

Production= sales + desired ending inventory - beginning inventory

Production budget:

January:

Sales= 3,000

Ending inventory= (2,000*0.2)= 400

Beginning inventory= (600)

Total= 2,800

February:

Sales= 2,000

Ending inventory= (2,500*0.2)= 500

Beginning inventory= (400)

Total= 2,100

March:

Sales= 2,500

Ending inventory= (2,700*0.2)= 540

Beginning inventory= (500)

Total= 2,540

April:

Sales= 2,700

Ending inventory= (2,900*0.2)= 580

Beginning inventory= (540)

Total= 2,740

5 0

3 years ago