Question 33 (6 Marks) A small manufacturer of candles needs assistance with their short term financing strategy Currently all of its short-term requirements are financed by a long term loan at a bank at variable rate of 15% per annum, the loan can be replaced at any time The company has estimated that 70% of their funding requirements are permanent and that the remainder fluctuates according to demand and other factors The company could obtain a line of credit at a variable rate of 11% per annum or a new long-term loan at a fixed rate of 10% per annum It is expected that interest rates may vary over time, but not by more than 2% in either direction Assist the company by recommending a mix (or single source) of financing for their short term requirements considering the above information, if the company wishes to employ a moderate working capital policy