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Assume that Hogan Surgical Instruments Co. hes $3,300,000 in assels. f it goes with a low-iquidty plan for the assets, it can eam a retum
Assume that Hogan Surgical Instruments Co. hes $3,300,000 in assels. f it goes with a low-iquidty plan for the assets, it can eam a retum of 16 percent, but with a high-liquidity plan, the return will be 12 percent. If the firm goes with a short-term financing pian, the finanoing costs on the $3,300,000 will be 8 percent, and with a long-erm francing plan, the financing costs on the $3.300,000 wil be 10 percent a Compute the anbopated relum ater financing costs with the most aggressive asset-inancing na Acticioated retum b. Compute the anticipatod retum ater financing coss wth the most conservetive assetnascng mx Antoipated returns c.Compute the andopated rehurn ator fineocing costs with the two moderate approaches to the asset-financing mix Anticipated Return Low iquidty High iquidty
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