In 2009 the Yankee Company Had Average Operating Assets of $200,000

question 19

Short Answer

In 2009 the Yankee Company had average operating assets of $200,000. If the company reported a return on investment of 50% then net operating income for 2009 must have been: a. $100,000
B) $50,000
C) $400,000
D) $200,000

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Definitions:

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposits, as mandated by regulatory authorities.

Total Checkable Deposits

represents the sum of all demand deposits and negotiable order of withdrawal (NOW) accounts in the banking system, which are available for immediate withdrawal and payment.

Depository Institutions Deregulation and Monetary Control Act

A United States federal law enacted in 1980 aimed at improving the efficiency of the financial institutions system and enhancing the control of the money supply.

Reserve Requirements

Regulations set by central banks requiring commercial banks to hold a certain percentage of their deposits in reserve as cash in their vaults or as deposits with the central bank.