A Bank Has an Average Balance of Transactions Accounts, August

question 121

Multiple Choice

A bank has an average balance of transactions accounts, August 10 to 23, of $824.46 million.The average balance in the cash account is $42.014 million over this period.The bank is carrying forward a deficit of $1.276 million from the last reserve period.The rules require no reserves to be maintained for the first $8.5 million, 3 percent for amounts between $8.5 million and $45.8 million, and 10 percent thereafter. The minimum reserves that may be maintained toward the next reserve maintenance period, September 23 to October 6, is

• A)$33.3170 million.
• B)$38.2470 million.
• C)$39.0073 million.
• D)$35.0876 million.
• E)$41.4064 million.

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Definitions:

Profit-Leverage Effect

A financial concept indicating that a reduction in purchasing costs can have a more significant impact on a company's profit than an equivalent increase in sales.

Cost of Purchases

The total expense incurred in acquiring goods and services, including price, shipping, and handling, among other costs.

Annual Sales

The total revenue a company generates from its operations over a one-year period.

Supply Chains

Networks involving organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.