High-liquidity plan the return

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Optimal policy mix Assume that Atlas Sporting Goods, Inc., has $800,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of 15 percent, but with a high-liquidity plan the return will be 12 percent. If the firm goes with a short-term financing plan, the financing costs on the $800,000 will be 8 percent, and with a long-term financing plan, the financing costs on the $800,000 will be 10 percent. (Review Table 6-11 for parts a, b, and c of this problem.)

Reference no: EM13804371

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