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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 a permanent component and a seasonal component, and find the monthly average for each of these components. Describe the amount of longterm and shortterm 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 shortterm funds are used to finance seasonal needs. Assuming that shortterm funds cost annually and that the cost of long term funds is 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 of return determine the cost of the aggressive strategy using the following format: $
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