Question
Nyabul Company is an investment group which has projected the following capital requirements for the next 12 months as follows; Month Amount Month Amount sh.000
Nyabul Company is an investment group which has projected the following capital requirements for the next 12 months as follows; Month Amount Month Amount sh.000 sh.000 Jan 2,800 Jul 16,800 Feb 2,800 Aug 19,400 Mar 4,200 Sep 12,600 Apr 5,600 Oct 7,000 May 8,400 Nov 5,600 Jun 12,600 Dec 4,200 The cost of shorter and long-term funds per annum is projected at 20% and 25% respectively during the same period. Required; i. Prepare a schedule showing the amount of permanent and seasonal funds requirement each month. ii. What is the average amount of long-term and short-term financing that will be required each month? iii. Calculate the total cost of working capital financing if the firm adopts a) aggressive financing strategy and b) conservative financing strategy
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