Question: First Corp. has $100 million in current assets and a current ratio of 1.25. Current liabilities cost on average 1.5% per year while the cost

First Corp. has $100 million in current assets and a current ratio of 1.25. Current liabilities cost on average 1.5% per year while the cost of long-term funds is 12% per year.

What is the dollar cost of financing net working capital?

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