If the public holds money, supply does not change, however, bank reverse will decrease, option C is correct.
<h3>What is Money Supply?</h3>
In simple terms, it can be defined as the total amount or volume of money in public or the volume of money in possession of the public.
When the bank holds a large amount of money than the public, the money in circulation will decrease.
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Answer:
WACC = 11.6%
Explanation:
<em>The weighted average cost of capital (WACC) is the average cost of all the various sources of long-term finance used by a business weighted according to the proportion which each source of finance bears to the the entire pool of fund. </em>
To calculate the weighted average cost of capital, follow the steps below:
<em>Step 1: Calculate cost of individual source of finance </em>
Cost of Equity= 13.5%
After-tax cost of debt:
= (1- T) × before-tax cost of debt
= 7%× (1-0.4)= 4.2%
<em>Step 2 : calculate the proportion or weight of the individual source of finance . (This already given) </em>
Equity = 80%
Debt= 20%
<em>Step 3:Work out weighted average cost of capital (WACC) </em>
WACC = ( 13.5%× 80%) + ( 4.2%× 20%) = 11.64%
WACC = 11.6%
Answer:
The break even level of units per month fall by 16 units.
Explanation:
The current breakeven units per month are,
Break even in units = 5600 / (20 - 6)
Break even in units-March = 400 Units
The fixed costs remain constant in the short run to a certain activity level so assuming that the fixed costs will remain $5600.
The new variable costs will be 6 * 0.9 = $5.4
Assuming everything else remains constant,
The new break even in units per month = 5600 / (20 - 5.4)
New break even in units = 383.56 rounded off to 384 units
As a result of decrease in the variable cost per units, the new break even point becomes 16 units less than the previous one.
Answer:
Cash budget.
Explanation:
A company's expected receipts from sales and planned disbursements to pay bills is commonly called a cash budget.
A cash budget can be defined as a budget consisting of expected cash receipts or estimation of the cash flows and planned disbursements to pay bills, for a business over a specific period of time.
In Financial accounting, a cash budget is typically used to determine whether a business firm has sufficient funds for its smooth operations and evaluate if cash are being spent judiciously or productively. A cash budget comprises of financial items such as costs incurred or expenses paid, revenues generated, payments and loan receipts collected.
