Answer:
<em>Run a recoverability test and then a fair value test.</em>
Explanation:
Business assets with a loss of value are subject to impairment tests to assess and identify the magnitude of the loss.
<em>Measuring the magnitude of the loss requires two steps:</em>
- Performing a recoverability check is to decide whether an impairment loss occurred by determining whether the future value of the undiscounted cash flows of the asset is less than the asset's book value. If the cash flow is less than the value of the book, the loss will be assessed.
- Measure the cost of damage by measuring the difference between the book value and the asset's market value.
Answer:
The value of the time premium between the August and October options is $0.50
Explanation:
A time premium or time value is the amount by which the price of a stock option exceeds its intrinsic value.
To calculate the time premium between August and October we will Subtract October extrinsic value - August extrinsic value
Time premium = 6.25 - 5.75 = $0.50
Answer: financial inflow will reduce the United States interest rate.
Explanation:
The options include:
a. financial inflow will reduce the United States interest rate.
b. financial outflow will increase the Japanese interest rate.
c. The interest rate gap between the United States and Japan will be eliminated.
d. Loanable funds will be exported from the U.S. to Japan
e. the interest rate in the United States will equal theinterest rate in Japan.
Based on the information given in the question, the things that will occur include:
• financial outflow will increase the Japanese interest rate.
• The interest rate gap between the United States and Japan will be eliminated.
• Loanable funds will be exported from the U.S. to Japan
• the interest rate in the United States will equal the interest rate in Japan.
Therefore, option A is the correct option.
Answer:
The bank will be able to lend:
$42,105,263 ($8 million/ 0.19)
Explanation:
The above amount which the bank can lend from the $8 million received from the Federal Reserve for a customer is a function of $8 million deposit in a customer's account and the reserve ratio. This is called the money multiplier.
The money multiplier is the amount of money that banks generate with each dollar of reserves. Reserves is the amount of deposits that the Federal Reserve requires banks to hold and not lend. The level of Reserves and deposit liabilities determine the amount a bank can lend out.
The process by which banks create more money than the physical money is called money creation. This shows that a bank creates more money in the economy through its lending activities.
