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amid [387]
3 years ago
7

Show the changes to the t-accounts for the federal reserve and for commercial banks when the federal reserve buys $50 million in

u.s. treasury bills. if the public holds a fixed amount of currency (so that all loans create an equal amount of deposits in the banking system), the minimum reserve ratio is 10%, and banks hold no excess reserves.
Business
1 answer:
mezya [45]3 years ago
4 0
When the Federal Reserve buys $50 million in Treasury bills from commercial banks, itsassets increase by $50 million (it now owns $50 million in Treasury bills) but its liabili-ties also increase by $50 million as it credits the banks’ accounts at the Federal Reserve,part of the monetary base. From the perspective of commercial banks, their assets fall by$50 million because they sell Treasury bills to the Fed, but their assets also rise by $50million when their deposits at the Fed (reserves) are credited with $50 million.Initial changes to the T-account of the Federal Reserve immediately after the Fed pur-chase of $50 million in Treasury bills:Initial changes to the T-account of commercial banks immediately after the Fed pur-chase of $50 million in Treasury bills:After the Federal Reserve buys $50 million from commercial banks, the banks areholding $50 million in excess reserves. Since the banks do not want to hold any excessreserves, they will increase loans and deposits by $500 million, the maximum amountthat $50 million in reserves can support. Therefore, the money supply will alsoincrease by $500 million.Total changes to the T-account of commercial banks after the Fed purchase of$50 million in Treasury bills:13.Show the changes to the T-accounts for the Federal Reserve and for commercial bankswhen the Federal Reserve sells $30 million in U.S. Treasury bills. If the public holds afixed amount of currency (so that all new loans create an equal amount of checkablebank deposits in the banking system) and the minimum reserve ratio is 5%, by howmuch will checkable bank deposits in the commercial banks change? By how muchwill the money supply change? Show the final changes to the T-account for the com-mercial banks when the money supply changes by this amount.AssetsLiabilitiesTreasury bills−$50 millionCheckable deposits+$500 millionReserves+$50 millionLoans+$500 millionAssetsLiabilitiesTreasury bills−$50 millionNo changeReserves+$50 millionAssetsLiabilitiesTreasury bills+$50 millionMonetary base+$50 millionS-194MACROECONOMICS,CHAPTER 14ECONOMICS,CHAPTER 30S187-S198_Krug2e_Macro_PS_Ch14.qxp2/25/098:02 PMPage S-194
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Patagonia, a multinational sports apparel company, is planning to launch its extreme weather gear product line in Nepal and the
bagirrra123 [75]

Answer: Create a sales plan that aims to enhance initial sales and market penetration with low prices based on high operational costs.

Explanation:

An emerging market is the economy of acountru that's developing and therefore,.such country is becoming more engaged with the global markets due to its growth and expansion as it grows.

The advise that'll be given to Patagonia to omit from consideration in crafting a strategy to enhance future profits in these two emerging markets is to create a sales plan that aims to enhance initial sales and market penetration with low prices based on high operational costs.

6 0
2 years ago
The Work Breakdown Structure (WBS) is normally developed by listing deliverables - major deliverables first and then progressive
AURORKA [14]

Answer:

The correct answer is True.

Explanation:

The steps to follow to create a work breakdown structure are as follows:

1. Organize a meeting and share with the main stakeholders: team members are one of the most valuable assets in the process of creating the work breakdown structure. They have the knowledge, experience and creativity necessary to define each deliverable reaching the most specific details.

2. Complete the definition of all project deliverables: it is about going one step beyond the level reached in the planning and 100% complete the information on all project deliverables, including internal and external, associating each one with its estimated completion time.

3. Break down each deliverable into smaller, more manageable parts: it is about achieving a realistic level of work planning by the project manager, which ensures that, without interfering with the total estimated project deadline and the overall plan, it can be completed by the work teams. It is about determining work packages. These units constitute the lowest level of the EDT and are pieces of work that are specifically assigned to a person or a team of people to be completed, under the supervision of the Project Director. It is recommended that they focus on a single point of responsibility. The work packages will be used later to define the activities and tasks in which the project is divided.

4. Review the results obtained: with the stakeholders, both at the time of finalizing the elaboration of the work breakdown structure, and when modifications or updates are included, if applicable. It is essential to avoid overlaps.

7 0
3 years ago
Luther Corporation Consolidated Balance Sheet December​ 31, 2006 and 2005​ (in $​ millions) Assets 2006 2005 Liabilities and ​St
jeyben [28]

Answer:

Luther Corporation

Current Ratio for 2006 is closest to:

1.1 : 1

Explanation:

a) Data and Calculations:

Total Current Assets = $144 million

Total Current Liabilities = $132 million

Current Ratio = Current Assets/Current Liabilities

= $144/$132

= 1.1 : 1

b) Luther Corporation's current ratio is a liquidity measure that shows Luther's ability to pay off short-term obligations worth $132 million or those due within one year with its current assets of $144 million.  The ratio tells investors and analysts of Luther Corporation how Luther can use its current assets to pay off its current debts.  Since Luther's current ratio is higher than 1, it is considered good, depending on the industry average.  This means that Luther's current ratio of 1.1 : 1 should not be considered in isolation, but in comparison with other firms in the industry and its performance over a number of years.

6 0
2 years ago
You are valuing an investment that will pay you $28,000 per year for the first 4 years, $43,000 per year for the next 12 years,
shepuryov [24]

Answer:

The value of the investment to you today is $441,751.52.

Note: The correct answer is is $441,751.52 but this is not included in the option. Kindly confirm the correct answer again from your teacher.

Explanation:

This can be determined using the following 5 steps:

Step 1. Calculation of today's of $28,000 per year for the first 4 years

This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV28,000 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

Where;

PV28000 = Present value or today's value of of $28,000 per year for the first 4 years = ?

P = Annual payment = $28,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 4

Substitute the values into equation (1) to have:

PV28,000 = $28,000 * ((1 - (1 / (1 + 0.12))^4) / 0.12)

PV28,000 = $85,045.78

Step 2. Calculation of today's of $43,000 per year for the next 12 years

Present value at year 4 can first be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV after 4 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)

Where;

PV at 4 = Present value at year 4 = ?

P = Annual payment = $43,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 12

Substitute the values into equation (2) to have:

PV at 4 = $43,000 * ((1 - (1 / (1 + 0.12))^12) / 0.12)

PV at 4 = $266,358.09

Therefore, we have:

PV43000 = PV at 4 / (1 + r)^n .............................. (3)

Where;

PV43000 = Present value or today's value of of $43,000 per year for the first 12 years = ?

PV at 4 = $266,358.09

r = Annual discount return rate = 12%, or 0.12

n = number of years = 4

Substitute the values into equation (3) to have:

PV43000 = $266,358.09 / (1 + 0.12)^4

PV43000 = $169,275.38

Step 3. Calculation of today's of $69,000 per year for the next 16 years

Present value at year 12 can first be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV after 12 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (4)

Where;

PV at 12 = Present value at year 12 = ?

P = Annual payment = $69,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 16

Substitute the values into equation (4) to have:

PV at 12 = $69,000 * ((1 - (1 / (1 + 0.12))^16) / 0.12)

PV at 12 = $481,205.04

Therefore, we have:

PV69000 = PV at 12 / (1 + r)^n .............................. (5)

Where;

PV69000 = Present value or today's value of of $69,000 per year for the first 16 years = ?

PV at 12 = $481,205.04

r = Annual discount return rate = 12%, or 0.12

n = number of years = 12

Substitute the values into equation (5) to have:

PV69000 = $481,205.04 / (1 + 0.12)^12

PV69000 = $123,513.35

Step 4. Calculation of today's of $61,000 per year for the next 13 years

Present value at year 16 can first be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV after 16 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (6)

Where;

PV at 16 = Present value at year 16 = ?

P = Annual payment = $61,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 13

Substitute the values into equation (6) to have:

PV at 16 = $61,000 * ((1 - (1 / (1 + 0.12))^13) / 0.12)

PV at 16 = $391,836.45

Therefore, we have:

PV61000 = PV at 16 / (1 + r)^n .............................. (7)

Where;

PV61000 = Present value or today's value of of $61,000 per year for the first 13 years = ?

PV at 16 = $391,836.45  

r = Annual discount return rate = 12%, or 0.12

n = number of years = 16

Substitute the values into equation (7) to have:

PV69000 = $391,836.45 / (1 + 0.12)^16

PV69000 = $63,917.01

Step 5. Calculation of the value of the investment to you today

This can be calculated by adding the values above:

PV = PV28,000 + PV43000 + PV69000 + PV69000 = $85,045.78 + $169,275.38 + $123,513.35 + $63,917.01 = $441,751.52

Therefore, the value of the investment to you today is $441,751.52.

4 0
2 years ago
A company issues $100,000 of 5%, 10-year bonds dated january 1. The bonds pay interest semiannually on june 30 and december 31 e
Gnesinka [82]

Assuming  the bonds are sold at par value, the issuer will records the sale with a debit to: Cash $100,000.

<h3>Journal entry</h3>

Based on the information given if the company issues the amount of  $100,000 of 5%, 10-year bonds dated january 1 the appropriate journal entry to record this transaction is:

Debit Cash $100,000

Credit Bond payable $100,000

(To record bonds sold at par value)

Inconclusion the issuer will records the sale with a debit to: Cash $100,000.

Learn more about journal entry here:brainly.com/question/14279491

5 0
2 years ago
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