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Rudiy27
3 years ago
6

The people in an economy have $10 million in money. There is only one bank that all the people deposit their money in and it hol

ds $0.5 million as required reserves. What is the money multiplier in this economy?
a. 1
b. 5
c. 10
d. 20
Business
1 answer:
pogonyaev3 years ago
7 0

Answer: d. 20

Explanation:

The Money multiplier is the number that new deposits are multiplied with to find out their total effect on the banking system.

It is calculated by dividing 1 by the required reserve ratio.

Required reserve ratio = 0.5/10

= 5%

Money Multiplier = 1/5%

= 20

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In working on a bid for project you have determined that $245,000 of fixed assets will be required and that they will be depreci
mote1985 [20]

Answer:

Question 1:

required investment $245,000

depreciation expense per year = ($245,00 - $23,200) / 5 = $44,360

you will also require $15,000 in working capital

annual cash costs = $68,500

what is the minimum amount of cash sales for accepting the project:

net cash flow₁ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14 = (0.65SR - $28,999) / 1.14 = 0.5702SR - $25,437.72

net cash flow₂ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14² = (0.65SR - $28,999) / 1.14² = 0.5002SR - $22,313.79

net cash flow₃ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14³ = (0.65SR - $28,999) / 1.14³ = 0.4387SR - $19,573.50

net cash flow₄ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14⁴ = (0.65SR - $28,999) / 1.14⁴ = 0.3849SR - $17,169.74

net cash flow₅ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360 + $15,000} / 1.14⁵ = (0.65SR - $13,999) / 1.14⁵ = 0.3376SR - $7,270.64

NPV = -initial outlay + cash flows

NPV = 0

initial outlay = cash flows

$260,000 = 0.5702SR - $25,437.72 + 0.5002SR - $22,313.79 + 0.4387SR - $19,573.50 + 0.3849SR - $17,169.74 + 0.3376SR - $7,270.64

$260,000 = 2.2316SR - $91,765.39

$351,765.39 = 2.2316SR

sales revenue = $351,765.39 / 2.2316 = $157,629.23

the closest answer is B = $155,119, but its NPV will be negative.

<u>so we have to select C = $162,515.75 that results in an NPV = $10,887. </u>

Question 2:

<u>The correct answer is D. return on equity will increase.</u>

If you lower your costs while your sales remain the same, your profits will increase as well as your ROE.  

7 0
3 years ago
HELP! i need help with this brochure project for economics and personal finance. its about Understanding Checking and Debit Acco
Andre45 [30]

Answer:

no idea

Explanation:

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6 0
3 years ago
As a consequence of the problem of scarcity:
lara31 [8.8K]

Answer:

The correct answer is letter "B": Individuals have to make choices from among alternatives.

Explanation:

Scarcity is the basic economic problem by which individuals have unlimited needs but count on limited resources to satisfy them. As a result, people must make trade-offs by which they sacrifice part of the satisfaction of one need to cover part of another need.

Scarcity pushes individuals to optimize the allocation of their resources to maximize the utility of the goods or services people use to satisfy their needs.

7 0
3 years ago
Jones Corp. reported current assets of $191,000 and current liabilities of $136,000 on its most recent balance sheet. The curren
stiks02 [169]

Answer:

acid-test ratio 1,4044

Explanation:

We are asked for a variation ofthe current ratio

whie current ratio is determinate like:

\frac{current\: assets }{current\: liab}

the acid-test will remove inventory from the current assets, leaving only cash, marketable securities and accounts receivables considered for the calculations:

191,000 current assets - 85,000 inventory = 106,000

136,000 current liabilities

191,600 / 136,000  = 1,4044

7 0
3 years ago
Carpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the
expeople1 [14]

Answer:

a. 4,000

Explanation:

Units in ending inventory

= Units in beginning work in process + Units started into production - Units transferred to the next department

= 2,400 + 10,500 - 8,900

= 4,000 units

8 0
3 years ago
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