Jem Jewelers has seasonal financing needs that vary from P250,000 to P2,725,000. The permanent financing requirement is P4,100,000. Indicate the appropriate strategy for each situation wheter it is AGGRESSIVE FINANCING or CONSERVATIVE FINANCING. a. Due to high inflation , short- term interest rates are much higher than long-term rates b. Sales revenue is unpredictable c. The firm has large proportion of fixed assets in its total assets d. The average seasonal financing need is P1,000,000 e. The average seasonal financing nedd is P2,000,000
Jem Jewelers has seasonal financing needs that vary from P250,000 to P2,725,000. The permanent financing requirement is P4,100,000. Indicate the appropriate strategy for each situation wheter it is AGGRESSIVE FINANCING or CONSERVATIVE FINANCING. a. Due to high inflation , short- term interest rates are much higher than long-term rates b. Sales revenue is unpredictable c. The firm has large proportion of fixed assets in its total assets d. The average seasonal financing need is P1,000,000 e. The average seasonal financing nedd is P2,000,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Jem Jewelers has seasonal financing needs that vary from P250,000 to P2,725,000. The permanent financing requirement is P4,100,000.
Indicate the appropriate strategy for each situation wheter it is AGGRESSIVE FINANCING or CONSERVATIVE FINANCING.
a. Due to high inflation , short- term interest rates are much higher than long-term rates
b. Sales revenue is unpredictable
c. The firm has large proportion of fixed assets in its total assets
d. The average seasonal financing need is P1,000,000
e. The average seasonal financing nedd is P2,000,000
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