1. Subsidiary A has excess funds, while Subsidiary B needs funds. If A purchases supplies from B, it could optimally provide financing by ________.
a. Extending a high interest rate loan to B
b. Borrowing a low-interest rate loan from B
c. Allowing B to lag its payments to A
d. Leading its payments to B
e. [Leading its payments to B] and [Allowing B to lag its payments to A]
2. Explain the importance of cost centers in the revenue cycle processes? Feel free to share any relevant experiences.
3. Alpha has committed to accumulating 1,000,000 by 2028 (20 years). How much will he need to save each year (assuming he earns an average of 6% each year) to have his million? Show all work.
4. Matt is currently 20 years old. He wants to retire at age 55 with $1,000,000 IN TODAYS DOLLARS. He assume 3.5% inflation. How much will he need to have saved at age 55?