Author Question: Rawhide Outfitters had projected its sales for the first six months of 2012 to be as follows: Jan. ... (Read 32 times)

azncindy619 · **on:** Jul 10, 2018

Rawhide Outfitters had projected its sales for the first six months of 2012 to be as follows:
Jan. 50,000 April 180,000
Feb. 60,000 May 240,000
Mar. 100,000 June 240,000
Cost of goods sold is 60 of sales.

Purchases are made and paid for two months prior to the sale.
40 of sales are collected in the month of the sale, 40 are collected in the month following the
sale, and the remaining 20 in the second month following the sale. Total other cash expenses are
40,000/month. The company's cash balance as of March 1st, 2012 is projected to be 40,000, and the
company wants to maintain a minimum cash balance of 15,000. Excess cash will be used to retire
short-term borrowing (if any exists). Fielding has no short-term borrowing as of March 1st, 2012.
Assume that the interest rate on short-term borrowing is 1 per month. How much short term
financing is needed by March 30, 2012?
A) 70,000 B) 15,000 C) 110,000 D) 85,000

Question 2

What is the Beta for a security whose returns do not vary across states of nature (a risk-free security)?

A) 0
B) Between 0 and 1
C) 1
D) > 1
E) < 0

chjcharjto14 · **Reply #1 on:** Jul 10, 2018

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