How Do Banks Create Money

question 70

Essay

How do banks create money?

Recognize the potential drawbacks of self-managing teams and strategies to mitigate these issues.

Understand the structural and personal factors that contribute to organizational conflict.

Recognize the difference between functional and dysfunctional conflict in organizations.

Identify strategies for conflict management including the enhancement of creativity and decision making.

---

Definitions:

Real Options

Occur when managers can influence the size and risk of a project’s cash flows by taking different actions during the project’s life. They are referred to as real options because they deal with real as opposed to financial assets. They are also called managerial options because they give opportunities to managers to respond to changing market conditions. Sometimes they are called strategic options because they often deal with strategic issues. Finally, they are also called embedded options because they are a part of another project.

NPV Method

Net Present Value method, a process for evaluating and comparing investments by calculating the difference between the present value of cash inflows and outflows over a period of time.

Capital Budget

A spending plan for a company's long-term investments in assets and projects, intended to maintain or grow the business.

DCF Analysis

Discounted Cash Flow Analysis, a valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for time value of money.