Explanation:
The projected available funds gap is the difference between the projected uses of funds and the projected sources of funds.
Projected Uses of Funds:
$600 million$500 million$200 million$100 million
Total Projected Uses = 600 + 500 + 200 + 100 = $1,400 millionProjected Sources of Funds:
$400 million$375 million
Total Projected Sources = 400 + 375 = $775 millionProjected Funds Gap = Total Projected Uses - Total Projected Sources
Projected Funds Gap = $1,400 million - $775 million = $625 million
Ultimate access to all questions.
No comments yet.
Q.24 Prime Limited is expecting new deposit inflows of $400 million and deposit withdrawals of $600 million next month. The bank has projected that new loan demand will reach $500 million, and customers with approved credit lines will need $200 million in cash. The bank will sell $375 million in securities but plans to add $100 million in securities to its portfolio. Calculate the projected available funds gap.
A
$600
B
$625
C
$800
D
$975