Answer: Setting interest rates and acting as a lender to banks
Explanation: The Fed or the Federal reserve is a central banking authority in any nation. It is responsible for maintaining the money supply in the economy. Some of the functions performed by the central bank are,
a. Setting interest rates and acting as a lender to banks
b. Print currency notes and coins
c. Setting the repo and the reverse repo rates
d. Clearing inter bank payments.
Therefore, the correct option is Setting interest rates and acting as a lender to banks.
Answer:
The answers are:
- A change in sales mix from high-margin to low-margin items may cause total profits to decrease despite an increase in total sales.
- A change in sales mix from low-margin to high-margin items may cause total profits to increase despite a decrease in total sales.
Explanation:
A company's profit is affected by its sales mix. Profits will always be higher if high margin products or services make up a large proportion of the sales mix. Even if total sales decrease, due to a decrease in the sales of low margin products, the company's profits might increase if more high margin products are sold.
For example, a Ford sells mostly pick up trucks, SUVs and cars. The profit margin from car sales is very low, so in order to make a larger profit the company must focus on selling more pick up trucks and SUVs. Even if the company losses market share by not selling cars, it will make more money by selling high margin products.
The answer is for each escrow account.
Both Joe and Rich should accept this project.
D) Both Joe and Rich
<u>Explanation:</u>
NPVJoe= $25,500 + $15,800 / 1.085 + $15,300 / 1.085^2
NPVJoe= $2,058.88
NPVRich= –$25,500 + $15,800 / 1.125 + $15,300 / 1.125^2
NPVRich= $633.33
Here Joe and Rich both invested a total amount of $25,500 and they are expected to get cash inflows of $15,800 and $15,300 in the year 1 and year 2 respectively they both has their own different rates of return i.e. 8.5% and 12.5% so we can calculate the net principle value of Joe is $2,058.88 and that of Rich is $633.33.
Answer:
b. He will prefer $85 two years from now.
Explanation:
Before making the choice, lets first calculate the present values of these cash flows,
PV factors @ 10% are as follows,
Year 1 = 0.909
Year 2 = 0.8265
Year 3 = 0.7513
Present value of 75 = 75 * 0.909 = 68.175
Present value of 85 = 85 * 0.8265 = 70.25
Present value of 90 = 90 * 0.7513 = 67.617
A rational individual thus would chose $85 two years from now as it yields the max present value.
Hope that helps.
