Jay Oullette, CEO of Bumper to Bumper Incorporated, anticipates that his company's year$-$end balance sheet will show current assets of $$300,000$ and current liabilities of $$200,000.$ Oullette has asked your advice concerning a possible early payment of $$75,000$ of accounts payable before year$-$end, even though payment isn't due until later.

Required:

a$.$ Calculate the firm's working capital and current ratio under each situation.

b$.1.$ Assume that Bumper to Bumper had negotiated a short$-$term bank loan of $$50,000$ that can be drawn down either before or after the end of the year. Calculate working capital and the current ratio at year$-$end under each situation, assuming that early payment of accounts payable is not made.

$2.$ When would you recommend that the loan be taken?

Complete this question by entering your answers in the tabs below.

Required B$1$

Required B$2$

Calculate the firm's working capital and current ratio under each situation.

Note: Round "Current ratio" answers to $1$ decimal place.

$\backslash$table$[[,$Do Not Prepay,Prepay$],[$Accounts Payable,Accounts Payable,$],[$Working capital,,$]]$