Because you can buy more bikes with the amount of money you make, hense the art of making a business also an entrepenuer
Answer:
C) Assets Increase and liabilities increase.
Explanation:
The Assets increase as a result of an inflow of cash as a current asset. Meaning there is an increase of cash. The liabilities increase as a result of a present loan or borrowing from the bank which is added to liabilities as an obligation.
Answer:
Because the current money multiplier is <u>2</u>, the Fed would <u>BUY $500,000</u> worth of bonds, <u>INCREASING</u> the monetary base and so increasing the money supply by $1 million.
Explanation:
if the Fed wants to increase the money supply by $1 million, then it would need to purchase US securities worth $500,000. The formulas used to calculate the impact of the Fed's operations are:
increase in money supply = additional funds x money multiplier
- money multiplier = 1 / reserve ratio = 1 / 50% = 2
- desired increase in money supply = $1 million
$1,000,000 = additional funds x 2
additional funds = $1,000,000 / 2 = $500,000
Answer:
Firm value in millions 1,605 (one thousand six houndred five milllions)
Explanation:
To evaluate a firm based on the free cash flow we do a procedure similar to gordon dividend grow model
We are going to replace dividend for the free cash flow
and the return for the WACC
notice we are given with the current FCF and for the gordon model we require dividend for the next year. (time=1)
here we need the same
FCF x (1+g) = 120 x (1 + 0.07) = 128.4
WACC .15
grow 0.07
Firm value in millions 1,605 (one thousand six houndred five milllions)
