On December 31, 2020, Marigold Company has $6,990,000 of short-term debt in the form of notes payable to Gotham State Bank due in 2021. On December 28, 2021, Marigold enters into a refinancing agreement with Gotham that will permit it to borrow up to 60% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $5,984,000 in May to a high of $7,987,000 in October during the year 2021. The interest cost of the maturing short-term debt is 15%, and the new agreement calls for a fluctuating interest at 1% above the prime rate on notes due in 2022. Marigolds December 31, 2020, balance sheet is issued on February 15, 2021.

To calculate, multiply the LOW by the percentage. Do we always use the lowest esimated number? Or do we sometimes take the average?