For the following problem(s), consider these debt strategies being considered by a corporate borrower. each is intended to provide $1,000,000 in financing for a three-year period.
strategy #1: borrow $1,000,000 for three years at a fixed rate of interest of 7%.
strategy #2: borrow $1,000,000 for three years at a floating rate of libor + 2%, to be reset annually. the current libor rate is 3.50%.
strategy #3: borrow $1,000,000 for one year at a fixed rate, and then renew the credit annually. the current one-year rate is 5%.
which strategy (strategies) will eliminate credit risk?

Cadbury has a chocolate factory in dunedin, new zealand. for easter, it makes two kinds of “easter eggs”: milk chocolate and dark chocolate. it cycles between producing milk and dark chocolate eggs. the table below provides data on these two products. demand (lbs per hour) milk: 500 dark: 200 switchover time (minutes) milk: 60 dark: 30 production rate per hour milk: 800 dark: 800 for example, it takes 30 minutes to switch production from milk to dark chocolate. demand for milk chocolate is higher (500lbs per hour versus 200 lbs per hour), but the line produces them at the same rate (when operating): 800 lbs per hour. a : suppose cadbury produces 2,334lbs milk chocolate and 1,652 lbs of dark chocolate in each cycle. what would be the maximum inventory (lbs) of milk chocolate? b : how many lbs of milk and dark chocolate should be produced with each cycle so as to satisfy demand while minimizing inventory?