Answer:
Money Created = $50000
Explanation:
Money Multiplier is ratio of multiple times final deposits, created by initial deposits received by bank. It is determined by Legal Reserve Ratio to be kept by commercial banks, as per central banks commands.
Final Deposits / Initial Deposits = 1/LRR
Given LRR = 0.20, Money Multiplier = 1/ 0.20 = 5 here
This means Final Deposits will be 5 times Initial Deposits. So given intital deposits = 10000 , they will be 10000 x 5 i.e = $ 50000
Answer:
they provide convenient receipts for purchases
Explanation:
Checks payment is a form of paying bills. They were created to allow people to make payments without carrying large amounts of cash hence convenient for purchases.They are also are safer than other forms of payment as they are traceable; when a transaction occurs and payment is made by checks, banks usually make copies of each check and the owner remains with an underlying copy from the check book.
Answer:
B) Abstraction forms an important part of economic analysis.
Explanation:
Economic abstraction refers to ignoring certain factors while doing economic analysis. Some minor or even important economic details must be assumed when trying to analyze certain situations. That is why economists love to use ceteris paribus (everything else constant). Macroeconomic theory is impossible to prove in a scientific way, only certain microeconomic theories can be tested scientifically. In order to perform macroeconomic analysis, economists must simplify the real world, since economy is too complex and has too many factors that can alter any possible analysis. It is impossible to analyze a nation's economy as a whole since millions of people and businesses make billions of economic decisions very day.
The stock price is mathematically given as
P=$57.64
<h3>What is the
stock price?</h3>
Generally, the equation for is Value after year mathematically given as
![V=\frac{(FCF for year 5*Growth rate)}{(WACC-Growth rate)}\\\\V = \frac{(55.4*1.05)}{(0.09-0.05)}](https://tex.z-dn.net/?f=V%3D%5Cfrac%7B%28FCF%20for%20year%205%2AGrowth%20rate%29%7D%7B%28WACC-Growth%20rate%29%7D%5C%5C%5C%5CV%20%3D%20%5Cfrac%7B%2855.4%2A1.05%29%7D%7B%280.09-0.05%29%7D)
V= $1454.25
Hence, the current value is mathematically given as
I=Discounting factor equal to the future cash flows multiplied by their present value
![I=\frac{-22.76}{1.09} + \frac{38.8}{1.09^2}+ \frac{43.4}{1.09^3}+\frac{52.3}{1.09^4}+\frac{55.4}{1.09^5}+\frac{1454.25}{1.09^5}](https://tex.z-dn.net/?f=I%3D%5Cfrac%7B-22.76%7D%7B1.09%7D%20%2B%20%5Cfrac%7B38.8%7D%7B1.09%5E2%7D%2B%20%5Cfrac%7B43.4%7D%7B1.09%5E3%7D%2B%5Cfrac%7B52.3%7D%7B1.09%5E4%7D%2B%5Cfrac%7B55.4%7D%7B1.09%5E5%7D%2B%5Cfrac%7B1454.25%7D%7B1.09%5E5%7D)
I=$1063.508769
current value for ordinary stock
I'=$1037.508769million
In conclusion, the stock price is
P=(1037.508769/18)
P=$57.64
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Answer:
Option A is the cheapest.
Explanation:
Giving the following information:
The engineering department estimates costs of $450,000 for the first year. It is estimated that if process and plant alterations are made, the waste treatment cost will decline $43,000 each year. As an alternative, a specialized firm, Hydro-Clean, has offered a contract to process the waste liquids for 15 years for $225,000 per year.
We need to use the following formula and chose the smallest net present value:
NPV= Io +∑ [Cf/(1+i)^n]
Option A:
Io= 407,000
Year cost= 43,000
NPV= 734,061
Option B:
Yearly cost= 225,000
NPV= 1,936,368