The Manager of the Bank Where You Work Tells You

question 136

Multiple Choice

The manager of the bank where you work tells you that your bank has $10 million in excess reserves. She also tells you that the bank has $400 million in deposits and $355 million dollars in loans. Given this information you find that the reserve requirement must be

• A)35/355.
• B)45/355.
• C)35/400.
• D)45/400.

Calculate the approximate MIRR of a project and understand its implications.

Recognize the technical problems associated with the IRR method.

Grasp the significance of a firm's cost of capital in evaluating investment projects.

Understand the implications of NPV and IRR for project selection under capital rationing.

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Definitions:

Assumptions

Premises or statements taken as true without proof for the purpose of argument or calculation in modeling and problem-solving.

Organization Has Inventory

Indicates that a business or entity maintains a stock of goods or materials for operational purposes and fulfillment of customer demands.

Decoupling

Refers to the strategy of creating independence between supply chain partners for improved flexibility and reduced dependency.

Inventory Management

The supervision of non-capitalized assets (inventory) and stock items, aiming to ensure the right products are in the right quantity for sale, at the right time.