Answer:
The company must borrow $3000 and option B is the correct answer.
Explanation:
The minimum cash balance is the required balance that the company should have at the end of the period. The decision to borrow or repay will be taken by comparing the period end balance with the minimum balance. If the period end balance is higher than the minimum balance, the company may decide to repay. If it is lower than the minimum balance, the company should borrow.
The period end balance can be calculated as,
Ending balance = Opening Balance + Cash receipts - Cash disbursements
Ending balance = 17000 + 120000 - 130000
Ending balance = $7000
Difference = 7000 - 10000 = -$3000
As the ending cash balance ($7000) is less than the minimum cash balance required ($10000), the company should borrow for the amount of difference. Thus, the company should borrow $3000
Answer:
Your friend says that Company A is doing a great job for shareholders. He says that their ROA is high. You point out that shareholders tend to like debt and the Company A has low debt. Furthermore, ROA is biased towards companies with low debt. You suggest that __ROE______ is a better measure of the job management is doing for shareholders.
Explanation:
Company A's Return on Equity (ROE) is a financial measure that investors use to gauge how their equity investments in the company are generating income. The Return on Assets (ROA) helps the same investors to measure how management is using Company A's assets or resources to generate more income. Company A's ROE is determined by dividing its net income by the equity, while its ROA is determined by dividing its net income by the assets. If the ROE equals the ROA, it shows that there is no leverage (debts) held by Company A.
Answer:
B. Expansionary monetary policy
Explanation:
Monetary policy is often referred to as "expanding" or "contractionary" monetary policy. While expansionary monetary policy means increasing the total money supply in the economy, contractionary monetary policy, contrary to the expansionary monetary policy, means reducing the total money supply in the economy. While expansionary monetary policy is generally applied to overcome the unemployment (recession) in the economy (assuming that the amount of money that increases as a result of the increase in money supply will decrease the interest which is the price of money); Contractionary monetary policy is implemented in order to reduce the inflation rate (assuming that the decrease in money supply will raise interest rates, the rising interest rate will decrease the marginal consumption trend of people and increase the marginal saving trend).
As from above, we can summarized that the expansionary monetary policy is the answer to the question and shortly it is when a central bank uses its tools to stimulate the economy. This policy will raise the money supply, decrease interest rates, and increases aggregate demand. It makes soar the growth of gross domestic product in turn, lessen the value of the currency, thereby decreasing the exchange rate.
Answer:
geographically to encompass the 12 largest metropolitan and financial areas in the United States.
Explanation:
When the Federal Reserve District Banks were to be divided there were huge discussions on such division but it was later discovered that important places and cities should get their separate divisions.
Accordingly, it was divided into 12 segments which shall cover the most vital economic centres and the most needful shall be served first.
And thus, the metropolitan and financial centres of United States got their area specific divisions.