explain in detail especially 4 and 5? What is the difference between the amounts? 136) Jia's Jewelers
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explain in detail especially 4 and 5? What is the difference between the amounts?
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136) Jia's Jewelers has seasonal financing needs that vary from $250,000 to $2,725,000. The permanent financing requirement is $4,100,000. Check the appropriate box indicating the better strategy for each of the following events. Event 1. Due to high inflation, short- term interest rates are much higher than long-term rates. 2. Sales revenue is unpredictable. 3. The firm has a large proportion of its assets in fixed assets. 4. The average seasonal financing need is $500,000. 5. The average seasonal financing need is $2,700,000. Aggressive Financing Strategy Conservative Financing Strategy I 136) Jia's Jewelers has seasonal financing needs that vary from $250,000 to $2,725,000. The permanent financing requirement is $4,100,000. Check the appropriate box indicating the better strategy for each of the following events. Event 1. Due to high inflation, short- term interest rates are much higher than long-term rates. 2. Sales revenue is unpredictable. 3. The firm has a large proportion of its assets in fixed assets. 4. The average seasonal financing need is $500,000. 5. The average seasonal financing need is $2,700,000. Aggressive Financing Strategy Conservative Financing Strategy I
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Answer rating: 100% (QA)
SOLUTION Due to high inflation shortterm interest rates are much higher than longterm rates In this situation the conservative financing strategy would be the better option for Jias Jewelers A conserv... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
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