six months are:     January February March April May June Short-Term 7.0% 8.0% 11.0% 14.0% 11.0% 11.0% Long-Term 12.0% 12.0% 12.0% 12.0% 12.0% 12.0%   Required: Assuming the company follows the hedging strategy, calculate the TOTAL dollar interest payments for the six months. If the company implemented a risky strategy would you expect total dollar interest payments to be higher or lower, briefly explain your answer (calculation not required

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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Harvey’s Health Food Store has estimated monthly current asset financing requirements for the next six months as follows:

 

Current Assets

January

February

March

April

May

June

Temporary

$6,000

$1,000

$2,000

$6,500

$5,000

$2,000

Permanent

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

 

Projected annual borrowing rates for the next six months are:

 

 

January

February

March

April

May

June

Short-Term

7.0%

8.0%

11.0%

14.0%

11.0%

11.0%

Long-Term

12.0%

12.0%

12.0%

12.0%

12.0%

12.0%

 

Required:

  1. Assuming the company follows the hedging strategy, calculate the TOTAL dollar interest payments for the six months.
  2. If the company implemented a risky strategy would you expect total dollar interest payments to be higher or lower, briefly explain your answer (calculation not required).
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