Please answer the below scenario question :

ABC Company supplies and fit tires of vehicles, the company experiences a surge in demand for its product during certain times of the year. An analysis of its working capital requirements over the last 5 years indicate that it has a permanent funding requirement of $350 000 in operating assets and seasonal requirements that vary between $0 and $1 250 000, with an average seasonal requirement of $525 100.

The total peak need for cash is $1 600 000 and the average cash surplus is $724 900

the company can borrow short term funds at 12.5% and long term funds at 8.0%. It can earn 7.0% on surplus funds investments

Company management must decide on the most suitable funding strategy given the above circumstances. As a member of the management team, you have been assigned the task of using the information available to conduct a funding strategy analysis.

REQUIRED : SHOW ALL CALCULATIONS AND ROUND OFF ALL FINAL ANSWERS TO THE CLOSEST $

7.1 Compare the annual costs for both an aggressive funding strategy and a conservative funding strategy.

7.2 Which funding strategy would you recommend to the management of ABC Company ? Substanciate your recommendation.