Amount of permanent and seasonal funds

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Reference no: EM131114146

Nagaya Company is an investment group which has projected the following capital requirements for the next 12 months as follows;

Month

Amount

Month

Amount


sh.000


sh.000

Jan

2,800

Jul

16,800

Feb

2,800

Aug

19,400

Mar

4,200

Sep

12,600

Apr

5,600

Oct

7,000

May

8,400

Nov

5,600

Jun

12,600

Dec

4,200

The cost of shorter and long-term funds per annum is projected at 20% and 25% respectively during the same period.

Required.

1. Prepare a schedule showing the amount of permanent and seasonal funds requirement each month.

 

2. What is the average amount of long-term and short-term financing that will be required each month?

3. Calculate the total cost of working capital financing if the firm adopts

An aggressive financing strategy.

A conservative financing strategy.

Reference no: EM131114146

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