Q. 03: Quarterly working capital levels for your firm for the next year are included in the following table. What are the permanent working capital needs of your company? What are the temporary needs? Quarters 3 $ 100 ($ 000) Cash Accounts Receivable Inventory Accounts Payable $ 100 96 $ 100 199 201 104 $ 100 99 905 604 505 52 95 95 97 Solution: Q. 04: Consider two loans with a 1-year maturity and identical face values: a 7.6% loan with a 0.97% loan origination fee and a 7.6% loan with a 4.7% (no-interest) compensating balance requirement. Which loan would have the higher effective annual rate? Why? Solution