In order to gain more independence from weather conditions Frank Further plans to build a projecting roof and to install two powerful patio heaters. He has to invest EUR 15.000,-. 10.000,- of which shall be funded with a bank loan. His principal bank is not willing to grant any further loan.

Frank pays his suppliers a few days after receipt of the invoice, whereas he con- cedes terms of payments of 45 days to his suppliers.

The amount of suppliers' invoices adds up to EUR 240.500 p.a. A random sam- ple of several invoices shows brings up an interesting situation:

The total amount of outgoing invoices to catering-customers is EUR 120.000,- p.a. Customers are overwhelmed by the quality of the sausages. Further is sure to convince at least 80% of his catering-customers to agree to a reduction of the term of payment from 45 to 30 days.

1) Calculated on the basis of the date of receipt of invoices: what is the average weighted period (days) of premature payment to suppliers? (8 points)

2) What net (a) interest gain / (b) liquidity gain would be achieved by taking full advantage of the given term of payment? (5 points)

3) What net (a) interest gain / (b) liquidity gain would be achieved by accelerat- ing the payments made by catering customers by 15 days? (5 points)

4) What is the amount of bank loans that Further would still need after imple- menting these measures? (2 points)

Please apply an opportunity rate of 5 %.