Schultz industries is considering the purchase of arras manufacturing. arras is currently a supplier for schultz, and the acquisition would allow schultz to better control its material supply. the current cash flow from assets for arras is $8.3 million. the cash flows are expected to grow at 7 percent for the next five years before leveling off to 4 percent for the indefinite future. the cost of capital for schultz and arras is 11 percent and 9 percent, respectively. arras currently has 3 million shares of stock outstanding and $25 million in debt outstanding. what is the maximum price per share schultz should pay for arras?

Uppose that the federal reserve purchases a bond for $100,000 from donald truck, who deposits the proceeds in the manufacturer’s national bank. what will be the impact of this purchase on the supply of money? the money supply will increase by $100,000. the money supply will increase by $80,000. the money supply will increase by $500,000. this action will have no effect on the money supply. if the reserve requirement ratio is 20 percent, what is the maximum amount of additional loans that the manufacturer’s bank will be able to extend as the result of truck’s deposit? the maximum additional loans is $100,000. the maximum additional loans is $80,000. the maximum additional loans is $20,000. the maximum additional loans is $500,000. given the 20 percent reserve requirement, what is the maximum increase in the quantity of checkable deposits that could result throughout the entire banking system because of the fed’s action? this action will have no effect on the money supply. the money supply will eventually increase by $80,000. the money supply will eventually increase by $500,000. the money supply will eventually increase by $100,000.