Automated Dynamics had sales of $6.5Million last year, and its earned a 4% return, after taxes, on sales. Recently, the company has fallen behind in its accounts payable. Although its terms of purchases are net 30 days, its accounts payable represent 60 days' purchases. The company's treasurer is seeking to increase bank borrowings in order to become current in meeting its trade obligations (i.e. to have 30 days' payable outstanding). The company's balance sheet is as follows (in thousands of dollars).

Cash	$200		Accounts payable	$900
Accounts receivable	500		Bank loans	1,100
Inventory	2,000		Accruals	400
Current assets	$2,700		Current liabilities	$2,400
Land and buildings	1,000		Mortgage on real estate	900
Equipment	1,300		Common stock	500
			Retained Earnings	1,200
Total assets	$5,000		Total Liabilities and equity	$5,000

a. How much bank financing is needed to eliminate the past0due accounts payable?

b. Would you as a bank loan officer make the loan? Why or why not?