Answer:
The bank will create excess reserve of $200 billion
Explanation:
The question measures the size of credit expansion associated with the new currency deposit. the computation below shows how excess reserves can be computed.
Money multiplier = 1
/Legal Reserve Ratio = 1/0.2 = 5
Excess Reserve Created = A x (1
/Legal Reserve Ratio)
Where: A = New currency deposit = $40
Legal Reserve Ratio = 0.20
Excess Reserve Created = $40 x (1/0.2) = $40 x 5 = $200 billion
The legal reserve of 5 indicates that for every unit of money reserved by banks, they are able to create 5 units of same.
The money creation capability of the banking system as a whole is depends on the legal reserve ratio. Legal reserve ratio is a fraction of a bank deposit which the law requires them to hold. The bank can only lend the balance after deducting the legal reserve.
Answer:
a. $81,900.
Explanation:
The contribution margin per unit is obtained by dividing the total contribution margin by the 24,000 units produced.
The expected operating income is given by the contribution margin minus the fixed costs. For 29,000 units sold, the operating income is:
The answer is a. $81,900.
I would say the shareholders could disapprove of the performance of their company if it was to consistently to lose money over say several quarters with no signs of improvement or no encouragement by management that this was a temporary situation,
Answer:
Irrelevant to the decision of whether to discontinue a product line because they will not differ between alternatives.
Explanation:
Unavoidable fixed costs can be defined as the costs that is sustained by an organization irrespective of if an activity is carried out or not.
Unavoidable costs are the costs that are encountered by a lot of businesses, this cost cannot be prevented even though production activities in the company are suspended in the short-run. These fixed costs are unavoidable and uncontrollable.
Unavoidable fixed costs is as a result of the various risks incurred by an organization inorder to stay relevant in the market. Example of unavoidable costs include tax payment, rental payments.
Answer:
D hope that helps you out
