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XYZ has forecast its total funds requirements for the coming year as shown in the following table. Divide the firm s monthly funds requirement into

XYZ has forecast its total funds requirements for the coming year as shown in the following table. Divide the firms monthly funds requirement into (1) a permanent component and (2) a seasonal component, and find the monthly average for each of these components. Describe the amount of long-term and short-term financing used to meet the total funds requirement under an aggressive funding strategy. Assume that, under the aggressive strategy, long term funds finance permanent needs and short-term funds are used to finance seasonal needs. Assuming that short-term funds cost 13% annually and that the cost of long term funds is 18% annually, use the averages found in part a to calculate the total cost of each of the strategies described in part b. Consider surplus investment with 5% of return (determine the cost of the aggressive strategy using the following format: $1.111,11)

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