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Assume that Hogan Surgical Instruments Co. has $2,500,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return

Assume that Hogan Surgical Instruments Co. has $2,500,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of 18 percent, but with a high liquidity plan, the return will be 14 percent. If the firm goes with a short-term financing plan, the financing costs on the $2,500,00 will be 10 percent and with a long-term financing plan, the financing cost on the $2,500,00 will be 12 percent.

a. compute the anticipated return after financing cost with the most aggressive asset-financing mix.

b. Compute the anticipated return after financing cost with the most conservative asset-financing mix.

c. Compute the anticipated return after financing costs with two moderate approaches to the asset financing mix.

d. would you necessary accept the plan with the highest return after financing costs, Briefly explain.

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