Part Six Financial Analysis and Planning Table 19.5. A negative cash requirement implies a positive cash flow from operations. b The interest rate on the bank loan is 2.5% per quarter, applied to the bank loan outstanding at the start of the quarter. Thus, the interest due in the second quarter is .025$100 million =$2.5 million. 'The "interest" cost of the stretched payables is 5% of the payment deferred. For example, in the second quarter, 5% of the $10.5 million of deferred payments is about $0.53 million. d The interest loss on securities sold is 2% per quarter. Thus, in the second quarter, Dynamic needs to find an additional .02$25 million =$.5 million. In the third quarter, the firm generates a $120 million cash-flow surplus from operations. Part of that surplus, $86.7 million, is used to pay off the stretched payables from the second quarter, as it is required to do. A small portion is used to pay interest on its outstanding loans. It uses the remaining cash-flow surplus, \$25.9 million (last line of panel A), to pay down its bank loan. In the fourth quarter, the firm has surplus funds from operations of $170.3 million. It pays off the interest and remaining principal on the bank loan and is able to put $93.9 million in cash and marketable securities. a. Revise Dynamic Mattress's short-term financial plan, assuming that it can borrow only $80 million from the bank. b. In the end, the bank loan is repaid, whether it is $100 million as in Table 19.6, or $80 million as it is here. Why, then, does the company end up with less addition to cash balances in the fourth quarter in this revised plan