Required:

A. Determine the annual financing costs using the following strategy:

Determine the permanent funds requirement. Insert the permanent funds amount in Column A.

Finance all permanent funds plus $25,000 per month of seasonal funds with long term debt. Insert amount funded by long term funds in Column B.

Finance the average monthly seasonal funds (Insert each month amount in Column C, determine average monthly amount) with short term debt.

The cost of long term funds is 10%.

The cost of short term funds is 8%.

The total financing cost is: ____________________

B. Pick one: This is an example of a(n)_____ _____ strategy.

aggressive conservative trade-off

Ace Business Forms Column Current Fixed Assets Total Assets Permanent Requirement by Long Term Funds Seasonal Amount funded Remaining Month Januar Februa March April Ma June Jul August Assets $125,000 $250,000 $375,000 130,000$250,000 380,000 135,000$250,000385,000 150,000$250,000 400,000 150,000$250,000 400,000 125,000$250,000 375,000 115,000 $250,000 365,000 120,000$250,000370,000 September 115,000 $250,000 365,000 100,000$250,000 350,000 November110,000$250,000 360,000 December 115,000$250,000 365,000 October Total = Monthly AVG. = Ace Business Forms Column Current Fixed Assets Total Assets Permanent Requirement by Long Term Funds Seasonal Amount funded Remaining Month Januar Februa March April Ma June Jul August Assets $125,000 $250,000 $375,000 130,000$250,000 380,000 135,000$250,000385,000 150,000$250,000 400,000 150,000$250,000 400,000 125,000$250,000 375,000 115,000 $250,000 365,000 120,000$250,000370,000 September 115,000 $250,000 365,000 100,000$250,000 350,000 November110,000$250,000 360,000 December 115,000$250,000 365,000 October Total = Monthly AVG. =