Solution-Amount of permanent and seasonal funds

Amount of permanent and seasonal funds

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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Amount of permanent and seasonal funds

Reference no: EM131114146

Reference no: EM131114146

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