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Klio2033 [76]
3 years ago
10

The Federal Reserve purchases ​$8 million in U.S. Treasury bonds from a bond​ dealer, and the​ dealer's bank credits the​ dealer

's account. The required reserve ratio is 19 ​percent, and the bank typically lends any excess reserves immediately. Assuming that no currency leakage occurs, calculate how much will the bank be able to lend to its customers following the Feds purchase $______million.
Business
1 answer:
Zinaida [17]3 years ago
6 0

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.

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2. The La Salle Bus Company has decided to purchase a new bus for $95,000 with a trade-in of their old bus. The old bus has a BV
Lera25 [3.4K]

Answer:

a.

9 recovery period years class

b.

$8,889 per year

Explanation:

a.

Buses are 9 years recovery period class , in which it is depreciated using historical method and it has 5 years GDS class life.

b.

Straight Line depreciation is a method of depreciation in which the cost of the asset net of residual value is divided over useful life.

We will depreciate this asset for only 9 years because it has 9 years class, even it will be kept for 10 years but the depreciation charged for 9 years.

Depreciation rate = ( Cost - Salvage Value ) / useful life = ($95,000 - $15,000) / 9 = $8,889

Depreciation charged in 2018 = $19,500

5 0
3 years ago
Read 2 more answers
Sheffield Corp. sold some of its plant assets during 2021. The original cost of the plant assets was $904000 and the accumulated
JulsSmile [24]

Answer:

The correct answer is Option C.

Explanation:

In the indirect cash flows statement, there are 3 sections, namely: net cash flows from operating activities, net cash flows from investing activities and net cash flows from financing activities.

The items in the question only affect the first two. Under the net cash flows from operating activities, we need to subtract the gain realized from the disposal of the plant assets from net income, which is Sales proceed minus Net book value, i.e., $90,800 - ($904000- $843000) = $29,800.

The sales proceed is $90,800. This would be recognized as cash inflow under net cash flows from investing activities.

8 0
3 years ago
Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hou
Butoxors [25]

Answer:

$5625.60

Explanation:

number of units produced =50 units

direct labour hours 100

direct materials $ 680

Direct labor cost $ 7,000

The unit product cost for Job P951 is;

Direct materials = $ 680

Direct labor cost $ 7,000

variable manufacturing overheads $ 6.00*100=600

total fixed manufacturing overheads= $ 273,000

total costs=$(680+7000+600+273000)=$281,280

unit product cost=$28,1280/50

=$5625.60

5 0
3 years ago
The minimum monthly payment for Rebecca's credit card is 2% of her balance or $15, whichever is higher. If Rebecca's balance at
Leno4ka [110]
$15.00 .....this sentence is just filler because $15.00 is too short.
6 0
3 years ago
Read 2 more answers
Which of the following types of teams is the most autonomous?A. Self-managing teamsB. Quality circlesC. Semiautonomous work grou
coldgirl [10]

Explanation:

Autonomy -

It is refers to the degree to which the workers have the freedom , discretion , independence , so as to decide when and how to accomplish their jobs .

Hence , from the options given in the question ,

  • The most autonomous are the self designing teams and the  self - managing teams .
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7 0
3 years ago
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