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lys-0071 [83]
3 years ago
15

Suppose Robina Bank receives a deposit of $53,589 and the reserve requirement is 3%. Answer the questions using this information

. Round your answers to two decimal places. What is the amount that Robina Bank must keep on hand as required by the Federal Reserve (Fed)? keep on hand: $ What is the amount that Robina Bank must have in excess reserves from this initial deposit? excess reserves: $ What is the total change in the M1 money supply from this one deposit? total change: $
Business
1 answer:
g100num [7]3 years ago
3 0

A) 2,679.45
B) 50,909.55
C) 1,071,780
Explanation:
The bank will keep 5% of the deposit:
53,589 x 5% = 2,679.45‬
Then, it will have in excess the remainder:
53,589 - 2,679.45 = 50,909.55‬
This amount can be used for another.
This makes a hypothetical loop. The borrower can also deposit and creating the chance or another loan and so on. The cycle repeats indefinitely
The maximum amount of new money can be determinate as follow:

53,589 / 0.05 = 1,071,780
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Coyne Corporation is evaluating a capital investment opportunity. This project would require an initial investment of $ 39 comma
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Answer:

NPV = $49,234.16

Explanation:

The Net present value (NPV) is the difference between the Present value (PV) of cash inflows and the PV of cash outflows. A positive NPV implies a good investment  project and a negative figure implies the opposite.  

NPV of an investment:  

NPV = PV of Cash inflows - PV of cash outflow  

<em>Present value of cash inflows:</em>

A × 1-(1+r)^(-n)/r

A- annual cash inflow-20,000   r-rate of return-10%, n-number of years-6

PV of cash flow = 20,000 × (1.1)^(-6)/0.1 = 87,105.21399

<em>PV of scrap value</em>

F×  (1+r)^(-n)

F- scrap value

= 2,000× 1.1^(-6)= 1,128.94

Initial cost = $39,000

NPV = 87,105.21399 + 1,128.94 -39,000=   $49,234.16  

NPV = $49,234.16

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Answer:

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Explanation:

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Answer:

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