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Assume Stratton Health Clubs, Inc., has $3 million in assets. If it goes with a low liquidity plan for the assets, it can earn a

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Assume Stratton Health Clubs, Inc., has $3 million in assets. If it goes with a low liquidity plan for the assets, it can earn a return of 20 percent, but with a high liquidity plan, the return will be 13 percent. If the firm goes with a short-term financing plan, the financing costs on the $3 million will be 10 percent; with a long term financing plan, the financing costs on the $3 million will be 12 percent. (Review Table 6-11 for parts a,b, and c of this problem.) a. Compute the anticipated return after financing costs on the most aggressive asset-financing mix. (Enter answers in whole dollar, not in million.) Anticipated return $ b. Compute the anticipated return after financing costs on the most conservative asset-financing mix. (Enter answers in whole dollar, not in million.) Anticipated return $ c. Compute the anticipated return after financing costs on the two moderate approaches to the asset-financing mix. (Enter answers in whole dollar, not in million.) d. This part of the question is not part of your Connect assignment. Table 6-11 Current asset liquidity and asset-financing plan \begin{tabular}{|c|c|c|} \hline & \multicolumn{2}{|c|}{ Asset Liquidity } \\ \hline Financing Plan & Low Liquidity & High Liquidity \\ \hline Short-term & 1 (risky) & 2 \\ \hline Long-term & High profit & Moderate profit \\ & High risk & Moderate risk \\ \hline & 3 & 4 (conservative) \\ \hline Moderate profit & Low profit \\ \hline Moderate risk & Low risk \\ \hline \end{tabular}

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