The monthly average seasonal funds requirement

Assignment Help Financial Management

Reference no: EM131360880

Lily's Luxuries has complied several factors relative to its financing mix. The firm pays 8% on short-term funds and 10% on long-term funds. The firms monthly current, fixed and total assets requirements for the previous year are summarized below:

Month Current Assets Fixed Assets Total Assets

Jan. $125,000 $250,000 $375,000

Feb. $130,000 $250,000 $380,000

March. $135,000 $250,000 $385,000

April $150,000 $250,000 $400,000

May $150,000 $250,000 $400,000

June $125,000 $250,000 $375,000

July $115,000 $250,000 $365,000

August $120,000 $250,000 $370,000

Sept. $115,000 $250,000 $365,000

Oct. $100,000 $250,000 $350,000

Nov. $110,000 $250,000 $360,000

Dec. $115,000 $250,000 $365,000

(a) the monthly average permanent funds requirement

(b) the monthly average seasonal funds requirement

(d) the annual financing cost (variable strategy)

Reference no: EM131360880

Questions Cloud

Action will result in additional cash flows : Riggs Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $312,000 over the next three years. If the discount rate is 17.5 percent, what is the NPV on this ..

Review the team report on mpbs located in the case : Describe your recommended approach and the expected impact of that approach on job performance. Address key HR and compensation issues identified at MPBS.Differentiate the components that would need to be included if MPBS were to use a point-ba..

Directly produce any sale but will reduce operating costs : Thornley Machines is considering a 3-year project with an initial cost of $900,000. The project will not directly produce any sales but will reduce operating costs by $445,000 a year. The project will require $24,000 in extra inventory for spare part..

What is the future value of the loan eight years from now : Future value. A speculator has purchased land along the southern Oregon coast. He has taken a loan with the end-of-year payments of $7,000 for 8 years. The loan rate is 8 %. What is the future value of the loan 8 years from now? If he is right on the..

The monthly average seasonal funds requirement : Lily's Luxuries has complied several factors relative to its financing mix. The firm pays 8% on short-term funds and 10% on long-term funds. The firms monthly current, fixed and total assets requirements for the previous year are summarized below: th..

Considering three-year project with an initial cost : Thornley Machines is considering a 3-year project with an initial cost of $900,000. The project will not directly produce any sales but will reduce operating costs by $445,000 a year. The equipment is depreciated straight-line to a zero book value ov..

Compare on aggressive and conservative asset mix strategies : Compare and contrast an aggressive and conservative asset mix strategies. (Your comparison should address goals, liquidity and risk.) How would it work in healthcare settings?

Accounts receivable receives an average : Accounts Receivable (AR) receives an average of 1003 payments per week. Assume that the checks coming in are either small or large. Small checks are for an average of $477 and large checks are for an average of $5091. 20% of the checks coming in are ..

What will be its optimal cash replenishment level : Rose Axels faces a smooth annual demand for cash of $5.08 million, incurs transaction costs of $283 every time the company sells marketable securities, and can earn 5.1 percent on its marketable securities. What will be its optimal cash replenishment..

User Account

All Pages