Answer:
Commercial banks, required reserve, loans, deposits, create.
Explanation:
The main function of commercial banks is to accept deposits and then to lend the same money (minus required reserves) back out. Banks make a profit by charging a higher interest rate on loans than the interest rate they pay on deposits. Through the loan process, banks are actually able to create money.
The major function of commercial banks is
1. Accepting deposits from people and business organzations.
2. Giving loans to Customers to be paid at a specific period of time at an agreed interest rate.
Required reserve is the minimum amount of money which in required for a commercial Bank to hold/save out of every deposit. If the required reserve is 10% of every deposit, a customer customer deposited $100. The required will be $10 which the bank will hold. The remaining $90 is the balance which banks can loan out to Customers.
Commercial Banks make profit by charging a higher interest rate on loan and lower interest rate on deposits. For example: 7.5% interest rate on loan and 2.5% interest rate on deposits. The 5% difference is the bank Profit.
A recurring activity is one that happens on a regular basis. These activities usually are very similar and refer to the same thing and objective. Recurring activities that an organization carries out in order to enhance its efficiency and its ability to meet requirements can lead to c<span>ontinual improvement.
</span>
Answer:
Payback period = 3 years
Explanation:
<em>The payback period is the average length of time it takes the cash inflow from a project to recoup the cash outflow.</em>
<em>Where a project is expected to generate a series of equal annual net cash inflow, the payback period can be calculated as: </em>
<em>Payback period =The initial invest /Net cash inflow per year
</em>
The cash inflow = Net operating income + Depreciation
= 105, 000 + 45,000 = 150,000
Note we have to add back depreciation because it is not a cash-based expenses. And payback period makes use of only cash-based revenue and expenses.
Payback period = 450,000/150,000
= 3 years
Payback period = 3 years
Answer:
D) 4 billion British pounds
Explanation:
Trade balance or balance of trade can be defined as the difference between a country's export and import at a particular period of time.
It could be a deficit or surplus.
Deficit trade balance refers to when the export of a country is less than it's import. This means more products are imported that exported.
Surplus trade balance refers to when export of a country is more than the import.
Import is the bringing in of goods from a foreign country. This means a particular country purchase goods from another country.
Export is the sending out of goods to a foreign country. That is the selling of goods to another country.
Trade balance= Export- Import
=14 billion British pounds- 10 billion British pounds
=4 billion British pounds
The trade balance that occurs here is surplus trade balance where export is more than import.
