Pinnacle Bhd is a small-scale family business that supplies plastic product for commercial use. It was established two years ago whose current revenue is about RM1 million a year. Recently, Pinnacle intends to raise funds for an expansion project that requires initial investment of RM100,000 to develop a new production line. The borrowed fund will be fully repaid only after the production line is up and running after 1 year. The Managing Director, Mrs. Chew, is thinking of issuing commercial paper because the prevailing commercial paper market rate is lower than the interest rates charged by other banking facilities.

Required:

Assess the suitability of using commercial paper to fund the working capital need of Pinnacle Bhd.