Charming Paper Company sells to the 12 accounts listed here. Account A B C 0 E F G H I Receivable Balance Outstanding $ 62,300 174,000 77,000 27,100 59,300 257,000 34,600 340,000 42,900 96,900 305,000 66,400 Average Age of the Account Over the Last Year 29 44 12 61 43 35 20 67 35 53 23 38 K Capital Financial Corporation will lend 90 percent against account balances that have averaged 30 days or less. 80 percent for account balances between 31 and 40 days, and 70 percent for account balances between 41 and 45 days. Customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan. The current prime rate is 18.50 percent, and Capital charges 5 50 percent over prime to Charming as its annual loan rate. a. Determine the maximum loan for which Charming Paper Company could qualify. Maximum loan amount b. Determine how much one month's interest expense would be on the loan balance determined in part a. (Do not round intermediate calculations. Round your finel answer to 2 decimal places.) Interest expense The treasurer for Pittsburgh Iron Works wishes to use financial futures to hedge her interest rate exposure. She will sell five Treasury futures contracts at $195.000 per contract. It is July and the contracts must be closed out in December of this year. Long-term interest rates are currently 14.30 percent. If they increase to 15.50 percent assume the value of the contracts will go down by 15 percent. Also, if interest rates do increase by 12 percent, assume the firm will have additional interest expense on its business loans and other commitments of $158000. This expense, of course, will be separate from the futures contracts What will be the profit or loss on the futures contract if interest rates increase to 15.50 percent by December when the contract is closed out? on futures contracts b-1. After considering the hedging, what is the net cost to the form of the increased interest expense of $158,000? Netcost b-2. What percent of this $158.000 cost did the treasurer effectively hedge away? (Input your answer as a percent rounded to 2 decimal pieces.) Percentage hedged away c. Indicate whether there would be a profit or loss on the futures contracts if interest rates went down. Loss O Profit