ENR 4,000 3,000 3,000 4,000 3,000 time 0 2 3 4 5 Price of Machine = 20,000 Q3. Assume that the required reserve ratio is 20 percent. If a commercial bank has $4 million cash in its vault, $2 million in short-term government securities, $3 million on deposit at a Federal Reserve Bank, and $10 million in checkable deposits, its Actual Reserves equal: A. $3 million B. $4 million C. $9 million D. $7 million E. $5 million r = 0 ITC = 10% Q1. Given the info above and assuming this company has a total corporate income tax obligation of $1,000 is this investment project feasible? a. No, because the present value of the net revenue stream exceeds the price of the machine b. Yes, because the present value of the net revenue stream exceeds the price of the machine. c. No, because the AC of the machine exceeds the present value of the net revenue stream. d. Yes, because the present value of the net revenue stream exceeds the AC of the machine. e. none of the above Q4. Assume that the required reserve ratio is 20 percent. If a commercial bank has $4 million cash in its vault, $2 million in short-term government securities, $3 million on deposit at a Federal Reserve Bank, and $10 million in checkable deposits, its Excess reserves equal: A. $3 million B. $4 million C. $9 million D. $7 million E. $5 million Federal Funds Market XR D XR XR Q2. Suppose the FED's target rate (rl) is above the current rate (r). What will the FED do? A. raise the rr B. lower the rr C. buy bonds D. sell bonds