PROBLEM 1

The company is constructing a corporate planning model. Cash sales are 40% of the company's sales with the remainder subject to the following collection pattern: 60% one month after sale, 30% two months after sales, 8% three months after sales, and 2% uncollectible.If 'Sn' is defined as total sales in month 'n,' which of the following expression correctly describes the company's collection on account in any given month?

a. 0.36Sn+1 + 0.18Sn+2 + 0.048Sn+3

b. 0.6Sn+1 + 0.3 Sn+2 + 0.08 Sn+3

c. 0.36Sn-1 + 0.18Sn-2 + 0.048Sn-3

d. 0.6Sn-1 + 0.3 Sn-2 + 0.08 Sn-3

----------------- PROBLEM 2

Ran Company wants to determine its cost of common stock equity using the CAPM. The company's investment advisors indicate that the firm's beta is equals to 1.3;the risk-free rate is 6%; and the market return is 10%.(Do not round off between computations. Round off the final answer to two decimal places. Example of writing your answer 2.58%)

**** please show the computation/solution for the problem. it will be a big help if you answer this in 10-20 mins. thank you so much ****