We, Executives of the F & H company, are reviewing complaints from the investors about the company's apathetic advance of profits and dividends.
Unlike those doubters, we accept aplomb in the long-run appeal for automated encabulators, admitting aggressive agenda products. We are, therefore, bent to advance to advance our allotment of the all-embracing encabulator market.
F&H has a accurate CAPEX approval process, and we are assured of allotment about 8% on investment. That’s a far bigger acknowledgment than F&H earns on its banknote holdings. The CFO went on to explain that F&H invested balance banknote in concise U.S. government securities, which are about absolutely certain but offered alone a 4% amount of return.
Please acknowledgment the afterward questions in detail, accommodate examples whenever applicable, abutment your altercation with citation peer-reviewed sources.
a. Is a forecasted 8% acknowledgment in the encabulator business necessarily bigger than a 4% safe acknowledgment on concise U.S. government securities? Justify why or why not?
b. Is F&H’s befalling amount of basic 4%?
c. How in assumption should the CFO actuate the amount of capital?
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