Revenue Cost of sales Gross profit Operating expenses EBITDA Appendix I Agri-Panel Inc. Excerpts from statement of profit and loss For the year ended June 30 (in $'000s) 2021 130,000 97,000 33,000 (14,000) 19,000 Excerpts from statement of financial position As at June 30 (in $'000s) 2021 Assets Cash 11,200 Accounts receivable 16,000 Finished inventory 26,000 Raw materials 3,000 Prepaid expenses 1,000 57,200 Property, plant, and equipment, net 35,600 Total assets 92,800 Liabilities Line of credit (Note) Payables and accruals Other liabilities Deferred tax liabilities Total liabilities Shareholders' equity Total liabilities and equity Note: Line of credit from MNB 14,000 26,000 40,000 900 1,100 42,000 50,800 92,800 committed five-year revolving credit facility with a fixed 5% interest rate secured by the accounts receivable and finished goods inventory Finance - Integrated Problem 3 Scenario (100 minutes) Agri-Panel Inc. is a manufacturer of high-density fibreboard panels. The company, based in Manitoba, has been in business for nearly 28 years and is owned equally by two brothers, Derek and Alex Maise. Currently, there are 1,000,000 common shares outstanding. The company follows IFRS. Extracts from the financial statements are included in Appendix I. Agri-Panel blends agricultural fibre from crop waste, which is essentially free, with wood chips to form the panels. The product has a very good reputation in the market, so Agri- Panel can charge premium prices and achieve higher than average operating margins. The company is looking to upgrade its equipment, which will cost $40,000,000. The shareholders have agreed to use $5,000,000 of the company's existing cash and finance the remaining balance of $35,000,000. The CFO has narrowed it down to two lenders (Appendix II). In addition to the lenders, SLR Manufacturing Inc. (SLR), the manufacturer of the equipment, has offered to lease the equipment to Agri-Panel (Appendix III). You, CPA, work as an associate with Campbell and Associates LLP, a financial and business advisory firm. Derek and Alex have engaged your firm to assist them in assessing the financing alternatives. It is July 2, 2021, and you have been asked by your boss, Heather Larimer, to prepare a draft memo to Agri-Panel addressing the items below. Task #1 Calculate the maximum amount of loan proceeds available under the Manitoba National Bank (MNB) secured term loan, given the terms and conditions listed in Appendix II. Qualitatively compare the characteristics of the two sources of financing available to Agri-Panel. Your response should be no longer than six pages, excluding any Excel files.