short-term financing

Project Description:

use the information below for this task. comfin company has estimates on its level of current
and total assets for the next two years:
year
201x jan feb mar apr may june july aug sep oct nov dec
total
assets
$500,
000
$475,
000
$460,
000
$470,
000
$475,
000
$485,
000
$495,
000
$555,
000
$600,
000
$650,
000
$700,
000
$750,
000
current
assets
$250,
000
$220,
000
$199,
900
$204,
698
$204,
392
$208,
980
$213,
459
$262,
829
$307,
085
$351,
227
$395,
251
$439,
156
year
201x +
1 jan feb mar apr may june july aug sep oct nov dec
total
assets
$600,
000
$570,
000
$552,
000
$564,
000
$570,
000
$582,
000
$594,
000
$660,
000
$720,
000
$780,
000
$840,
000
$900,
000
current
assets
$350,
000
$350,
000
$352,
100
$359,
302
$365,
608
$373,
020
$380,
541
$397,
171
$412,
915
$428,
773
$444,
749
$460,
844

a. estimate the levels of permanent and temporary current assets for comfin over these months.
find the average amount for fixed assets, permanent current assets, and temporary current
assets in the year 201x and year 201x + 1.
b. what average amounts of short-term and long-term financing should comfin have during each
year if it wants to follow a maturity-matching financing strategy over time?
c. what average amounts of short-term and long-term financing should comfin have during each
year if it wants to follow an aggressive financing strategy over time?
d. suppose comfin’s cost of short-term funds is 8 percent and its cost of long-term funds is 15
percent. use your answers in (b) and (c) to compute the cost of each strategy.
e. what are the pro and con arguments toward each strategy in terms of profitability, risk, and
company liquidity?

answer each problem in detail with a conclusion and results.
submit your answer in a microsoft excel file, showing step-by-step solutions to all calculations.
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