1. What is the difference between aggressive and conservative working capital financing policies? What are the relative benefits and drawbacks of each of these extremes of working capital financing policies?

2. How can issuing commercial paper reduce interest costs? What firms have access to the commercial paper market?

3. What is the main factor that determines the effective interest rate on a loan?

4.What is the difference between free trade credit and costly trade credit?

5.Why does trade credit typically equal a higher percentage of current liabilities for smaller firms when compared to larger firms?