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2 years ago

Reserves change by $12 million, and the money supply changes by $60 million. what does the simple deposit multiplier equal?

1 answer:

8 0

Reserves change by $12 million, and the money supply changes by $60 million. 5 is the simple deposit multiplier equal.

simple deposit multiplier = ΔM/ΔR

= 60/12 = 5

The simple deposit multiplier assumes that banks hold no excess reserves, and households and corporations deposit the complete amount of every test in a monetary institution and no longer take out any as foreign exchange.

The deposit multiplier is also referred to as the deposit enlargement multiplier or the clean deposit multiplier. it is linked to the part of a financial institution's deposits that may be lent to borrowers. This lending hobby injects coins into the kingdom's cash delivery and enables financial hobby.

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During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the compan

Mice21 [21]

Answer:

Part 1

Cost of Equipment Sold = $9300

Accumulated Depreciation of Equipment Sold = $ 1100

Cash received from Sale = $5300

Part 2

Net Cash Flows from Operating Activities

Add Back (Positive) to Operating Profit for the year : Loss on sale of equipment $ 2900

Part 3

Net Cash flows from Investing Activities

Add (Positive) Proceeds from Sale of Equipment $ 5300

Explanation:

Part 1

Cost of Equipment Sold:

The figure is obtained from Equipment At Cost Account.

Open the Account as follows:

Beginning Balance $ 20300 (debit), Ending Equipment $ 11000, Balancing figure $ 9300 (20300-11000) is the cost of equipment sold.

Accumulated Depreciation of Equipment Sold

The figure is obtained from Accumulated Depreciation.

Open the Account as follows:

Beginning Balance $ 1980 (credit), Profit and loss - Depreciation $ 870 (credit), Ending Balance $ 1750 (debit), Balancing figure $ 1100 (1980+870-1750) is the Accumulated Depreciation on Equipment Sold

Cash Received on Sale

This figure is figure is obtained from Equipment Disposal Account.

Open the Account as follows:

Cost of Equipment Sold $ 9300 (debit), Accumulated depreciation on equipment sold $1100(credit),Loss on Sale of Equipment $2900(credit),the Balancing figure $5300 (9300-1100-2900)

Part 2

Loss on sale of Equipment is the only Income Statement Item affecting the Operating Activity of the Cash Flow Statement.

Add back to Operating profit since this is a non-cash item and was initially deducted in the calculation of Operating Profit.

Part 3

Sale of Equipment results in Cash Inflow and affects the Cash Flows from Investing Activities Section of Cash Flow Statement.

Hence a positive amount should be added to reflect this inflow.

4 0

4 years ago

The common stock of Dayton Repair sells for $43.19 a share. The stock is expected to pay $2.20 per share next year when the annu

mihalych1998 [28]

Answer: 7.35%

Explanation:

Based on the information given, the market rate of return on this stock will be calculated as:

= (D1/P0) +G

where,

D1= Dividend at year 1 = 2.20

P = price at present =43.19

G = dividend growth rate =2.25%

We then slot the figures into the formula and we will get:

= (D1/P0) +G

= (2.20 / 43.19) + 2.25%

= 0.051 + 2.25%

= 5.1% + 2.25%

= 7.35%

Therefore, the market rate of return will be 7.35%.

4 0

3 years ago

Net income reported under absorption costing will exceed net income reported under direct costing for a given period if: Group o

bazaltina [42]

Answer:

b. Production exceeds sales for that period.

Explanation:

This is said to be calculated or gotten from Earnings Before Interest And Taxes(EBIT). This is generally referred to as EBIT. They are returns from investments made in real estate or other forms of investments in a company that is gathered after all taxes and also other interests.

In arithmetic calculations it is done by calculating gross revenue from sales and services and also labour that was been involved. Remove the cost of goods sold, then add expenses from utilities, rent etc.

7 0

3 years ago

Multiple Choice Question 104 Oriole Company's accounting records reflect the following inventories: Dec. 31, 2020 Dec. 31, 2019

irina1246 [14]

Answer:

COGS= $2,129,700

Explanation:

Giving the following information:

Finished goods inventory:

Beginning= $190,000

Ending= $150,000

Cost of goods manufactured= $2,089,700

The cost of goods sold is calculated using the following formula:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 190,000 + 2,089,700 - 150,000

COGS= $2,129,700

3 0

4 years ago

Firms that can employ and establish _________________, are more likely to protect their competitive advantage from being copied

pishuonlain [190]

Firms that can employ and establish isolating mechanisms are more likely to protect their competitive advantage from being copied and/or eroding away.

Isolation mechanisms:

A company is able to maintain its competitive edge for a longer period of time if it can stop a rival from copying the resource or capability that provides it that advantage. Isolation mechanisms is the name of this technique. For instance, a patent is a legitimate tool to stop imitation.

A firm's objective is to have a prolonged competitive advantage when a resource or capability gives the firm an advantage over competitors for an extended period of time. The industry will determine how long a company can preserve a competitive advantage.

If a business can maintain a competitive edge for a year in a fast-moving field like information technology or quick fashion, it may be quite happy. In an industry with less frequent changes, such as feminine hygiene, a persistent competitive advantage may remain considerably longer.

A sustainable competitive edge cannot be maintained by any company indefinitely. The competition is constantly working to improve its own competitive edge.

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7 0

2 years ago