Kindly solve the following question and shows step by step calculations. Thank you

Assignment #4: Small Business Financing [15%]

This assignment relates to the following Course Learning Requirements:

CLR 1: Demonstrate the competencies required in the professional workplace.

CLR 3: Complete authentic accounting related tasks similar to those one would experience in a typical business.

CLR 4: Determine which government regulations apply to different businesses.

CLR 5: Work effectively in teams to complete required tasks.

Objective of this Assignment:

In this assignment, students will demonstrate their abilities to complete small business financing requirements.

Pre-Assignment Instructions:

To prepare you for this assignment, read the module 4 content, review all additional resources provided and complete the learning activity 4.1.

Assignment Tasks:

For this assignment, you will read the following scenario and familiarize yourself with Pulsar Inc.s finances. Once you have a good understanding of the financial undertakings, use the information provided in the scenario to answer the questions that follow below.

Pulsar Inc. is a lumber manufacturer from Ontario, Canada. Pulsars operations are very working capital intensive, as it has to maintain inventory as well as extend credit to its customers. Hence, Pulsar has set up a funding line of credit with the bank to manage its working capital needs. It has currently an approved limit of $200,000.

The bank has informed Pulsar of the following restrictions/constraints on borrowing under this line:

60% of the receivables less than 90 days old

50% of finished goods inventory

Debt/Equity ratio no worse than 0.5:1

Here is the snapshot of Pulsars latest financial information:

Pulsar has accounts receivable worth $150,000 and inventory worth $200,000

The ageing schedule of the receivable is as follows:

Maturity	Receivables
<30 days	$100,000
>= 30 days to <90 days	$35,000
>90 days	$15,000

Inventory

Inventory Type	Inventory
Raw Material	$50,000
Finished Goods	$150,000

Total liabilities of the company is $400,000 while the total equity position is $1,000,000.

Use the above information to answer the following questions. Questions must be answered in a Word Doc.

Questions:

Does Pulsar Inc. qualify to borrow against the credit line?

How much would be the maximum amount the bank would lend to Pulsar Inc. under the credit line?

Pulsar Inc.s owner has another company where she has an outstanding balance in the Due to Shareholder account. She was advised by the public accountants to register the debt with the Personal Property Security Act (PPSA) just to be on the safe side.

Explain the key elements of the PPSA in your own words and why they would benefit Pulsar Inc.s owner.