Rose Chocolates Corporation has forecasted its total funds requirements for the coming year as shown in...
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Rose Chocolates Corporation has forecasted its total funds requirements for the coming year as shown in the table below: (b) Month (c) January February March April May June July August September October November December Total Funds Requirements A conservative funding strategy. $40,000 $50,000 Given that short-term funds cost 4% annually and that long-term funds cost 8% annually, calculate the total cost of each of the following strategies. Copy the above table and show all necessary workings. Note: No marks will be awarded if there are no workings. (a) An aggressive funding strategy. $40,000 $40,000 $30,000 $55,000 $35,000 $35,000 $55,000 $60,000 $70,000 $90,000 (5 marks) (2 marks) Given the firm's management is currently focusing on reducing risk, should the firm adopt the Aggressive financing strategy or Conservative financing strategy? Provide justification for your answer. Rose Chocolates Corporation has forecasted its total funds requirements for the coming year as shown in the table below: (b) Month (c) January February March April May June July August September October November December Total Funds Requirements A conservative funding strategy. $40,000 $50,000 Given that short-term funds cost 4% annually and that long-term funds cost 8% annually, calculate the total cost of each of the following strategies. Copy the above table and show all necessary workings. Note: No marks will be awarded if there are no workings. (a) An aggressive funding strategy. $40,000 $40,000 $30,000 $55,000 $35,000 $35,000 $55,000 $60,000 $70,000 $90,000 (5 marks) (2 marks) Given the firm's management is currently focusing on reducing risk, should the firm adopt the Aggressive financing strategy or Conservative financing strategy? Provide justification for your answer.
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To calculate the total cost of each financing strategy we need to determine how much shortterm and l... View the full answer
Related Book For
Construction Accounting And Financial Management
ISBN: 9780135232873
4th Edition
Authors: Steven J. Peterson
Posted Date:
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