The St. Hubbins Plumbing Company (SHPC) is a supplier of plumbing related goods and services to the commercial construction industry. Primarily, it serves as a subcontractor in the construction of small-scale retail strip centers. Since the bulk of retail center construction occurs in the Spring & Summer months (primarily from late March to late September) SHPC has a rather seasonal (but predictable) pattern of working capital needs, as summarized by the following table: Table 1 Permanent Financing Needs Used to finance Fixed Assets + Permanent Working Capital $1.25 Million Peak Financing Needs Includes the above + maximum seasonal Working Capital $3.25 Million Average Financing Needs The average size of the firms balance sheet over a 12-month period $2.45 Million Buildup of Accounts Receivable Terms: Net 90 Days 50% of Seasonal Buildup The financing and investment options available to SHPC are summarized as follows: Table 2 Financing Periodic Cost Trade Credit / Accrued Wages with 30-day maturity 0% 6-month line of credit from First Plumbers Bank 2.25% per 6 months 10-year note from Second National 6.75% per year Factoring of Receivables 2.5% of face value Issuance of New Equity 15% per year Rate of Return on Money Market Securities .15% per month Table 3 As the CFO of SHPC, you are considering 3 possible financing plans for the next fiscal year: Plan X Plan Y Plan Z Finance 50% of permanent need with Equity Finance 100% of permanent need with Equity Finance 100% of permanent need with Equity Finance 50% of permanent need with a 10-year note Factor Receivables Finance all other needsup to the Total Peak Need with a 10-year note Finance 50% of seasonal need with Trade Credit Finance remainder of seasonal need a 6-month line of credit Re-invest any excess funds in Money Market Securities Finance the remainder of seasonal need with a 6-month line of credit Tasks Use Table 1 to calculate both the peak and average SEASONAL financing needs. Calculate the EAR for each financing source listed in Table 2. For each financing plan in Table 3, calculate the dollar amount of financing supported by each source. For Plan Z, calculate the dollar amount of funds available for re-investment on an average annual basis Use your calculations in 1 4 above to calculate BOTH the annual dollar financing cost AND the Cost of Capital (a percentage) for each financing plan listed in Table 3. Can someone answer the Last two tasks?