Explanation:
| Cash Inflows | Amount |
|---|---|
| Deposit inflows | $119 |
| Borrowings from the money market | $110 |
| Sales of bank assets | 61 |
| Revenues from sale of non-deposit services | 118 |
| Scheduled loan repayments | $122 |
| Total Cash Inflows | $530 |
| Cash Outflow | Amount |
|---|---|
| Deposit withdrawals | $129 |
| Acceptable loan requests | $90 |
| Stockholder dividend payments | 172 |
| Repayments of bank borrowings | 84 |
| Operating expenses | 70 |
| Total Cash Outflow | $545 |
A financial firm’s net liquidity position = Supplies of liquidity flowing into the financial firm - Demands on the financial firm for liquidity
= Total cash inflow − Total cash outflow
= $530 − $545 = −$15
Therefore, ABC Bank Ltd. has a projected net liquidity deficit of $15
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Q.3885 ABC Bank Limited predicts its cash inflows and outflows over the next one day to be as in the following table:
| Amount | Amount | ||
|---|---|---|---|
| Deposit withdrawals | $129 | Sales of bank assets | 61 |
| Deposit inflows | $119 | Stockholder dividend payments | 172 |
| Scheduled loan repayments | $122 | Revenues from sale of non-deposit services | 118 |
| Acceptable loan requests | $90 | Repayments of bank borrowings | 84 |
| Borrowings from the money market | $110 | Operating expenses | 70 |
Calculate the bank’s projected net liquidity position within the next one day.
A
-$15
B
-$23
C
$15
D
$23
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