Quarter Current Assets Fixed Assets

I $425000 $1315000

II $365000 $1315000

III $395000 $1315000

IV $205000 $1315000

Woozle Industries has the expected current and fixed asset requirements listed above for each of

the next four quarters:

Determine the level of long-term permanent funding the average short term seasonal funding and the average level of excess funding

under an aggressive working capital financing strategy.

Determine the level of long-term permanent funding the average short term seasonal funding and the average level of excess funding

under a conservative working capital financing strategy.

Using your answers for (a) and (b) determine total net interest cost for each strategy given that long-term financing carries a cost of 9.5% short-term debt carries an interest rate of 4.5% and any excess funds can be invested at a rate of 1.25%.