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Aggressive versus conservative seasonal funding strategy Dynabase Tool has forecast is total funding requirements for the coming year as shown in the following table a.
Aggressive versus conservative seasonal funding strategy Dynabase Tool has forecast is total funding requirements for the coming year as shown in the following table a. Divide the firm's monthly funding requirement into (1) in permanent component and (2) a seasonal component, and find the monthly average for each of these components b. Describe the amount of long-term and short-term financing used to meet the total funda requirement under (1) an aggressivo funding strategy and (2) conservative funding strategy Assume that under the aggressive strategy, long-term funds finance permanent needs and short term funds are used to financo sonsonal noods c. Assuming that short-term lunding costs 5% annually and that the cost of long-term funding is 10% annually, use the averages found in part a to calculate the total cost of each of the strategies described in part b. Assume that the firm can earn 3% on any excess cash balances, d. Discuss the profitability risk trade-offs associated with the aggressive strategy and those associated with the conservative strategy y Dynabase Tool has forecast its total funding requirements for the coming year as shown in the following ermanent ng used t Data Table lompor ative f nds are d that the btal cos the aggres (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet.) a permanent Jomponer uirement is irement is $1 Month January February March April May June Amount $2.000.000 $2.000.000 $2,000,000 $5.000.000 $5.000.000 $8,000,000 Month July August September October November December Amount $11.000.000 $15.000.000 $11,000,000 $6.000.000 $4,000,000 $4.000.000 ancing used: Jative fundi he amount it the amount it Print Done the amount it
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