P14-4 (similar to) Question Help Aggressive versus conservative seasonal funding strategy Dynabase Tool has forecast its total funding requirements for the coming year as shown in the following table: a. Divide the firm's monthly funding requirement into (1) a 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 funds requirement under (1) an aggressive funding strategy and (2) a conservative funding strategy. Assume that under the aggressive strategy, long-term funds finance permanent needs and short-term funds are used to finance seasonal needs. C. Assuming that short-term funding 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 A Data Table - XL a. Divide the firm's monthly funding requirement into (1) a permanent component and (2) a seasonal component, and find the monthly (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Month January February March April May June Amount $2,000,000 $2,000,000 $2,000,000 $4,000,000 $6,000,000 $8,000,000 Month July August September October November December Amounte $13,000,000 $16,000,000 $11,000,000 $8,000,000 $3,000,000 $3,000,000 Press Continue to see more. 10 parts Print Done remaining P14-4 (similar to) Question Help Aggressive versus conservative seasonal funding strategy Dynabase Tool has forecast its total funding requirements for the coming year as shown in the following table: a. Divide the firm's monthly funding requirement into (1) a 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 funds requirement under (1) an aggressive funding strategy and (2) a conservative funding strategy. Assume that under the aggressive strategy, long-term funds finance permanent needs and short-term funds are used to finance seasonal needs. C. Assuming that short-term funding 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 A Data Table - XL a. Divide the firm's monthly funding requirement into (1) a permanent component and (2) a seasonal component, and find the monthly (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Month January February March April May June Amount $2,000,000 $2,000,000 $2,000,000 $4,000,000 $6,000,000 $8,000,000 Month July August September October November December Amounte $13,000,000 $16,000,000 $11,000,000 $8,000,000 $3,000,000 $3,000,000 Press Continue to see more. 10 parts Print Done remaining