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givi [52]
3 years ago
9

Neumann Corporation is planning to issues bonds with a face amount of $2 million. If Neumann's accountant, Betty, wants to calcu

late the expected issue she should calculate the ____ of the related future cash payments using the ____ interest rate.
Business
2 answers:
aalyn [17]3 years ago
6 0

Answer:

Present value; market Interest rate

Explanation:

Betty should calculate the present value of related future cash payments using the market interest rate in order to determine the expected issue.

Present value (PV): This refers to the current value of a future sum of money at a constant rate of return.

It can calculated by;

PV= FV/(1+r)^n

Where,

PV=present value

FV=future value

r=rate of return

n=number of periods

Present value states that a specific amount of money today is worth more than that same amount in the future.

Market interest rate: This is the rate of interest paid in the bond market on bonds. It is the rate of interest paid on investment which is usually determined by the interaction of the forces of demand and supply in the money market. It can also be called effective interest rate.

aalyn [17]3 years ago
3 0

Answer:

1. Present value

2. Market

Explanation:

Neumann Corporation is planning to issues bonds with a face amount of $2 million. If Neumann's accountant, Betty, wants to calculate the expected issue she should calculate the present value of the related future cash payments using the market interest rate.

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2 years ago
A required reserve ratio of 7 percent gives rise to a simple deposit multiplier of?
blsea [12.9K]

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<h3>What is reserve ratio?</h3>

The reserve ratio is the percentage of reservable liabilities which commercial banks must keep rather than lend or invest. This is a requirement set by the country's central bank, which is the Federal Reserve in the United States. It is also referred to as the cash reserve ratio.

Some key points related to reserve ratio are-

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  • Regulation D of the Federal Reserve Board establishes the reserve ratio.
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  • Suppose the Federal Reserve determined that the reserve ratio should be 11%. This means that if a bank has $1 billion in deposits, it must keep $110 million in reserve ($1 billion x.11 = $110 million).

To know more about reserve ratio, here

brainly.com/question/13758092

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Explanation:

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