Instruction to Chegg Solver : Must be solved with Documents( Word pad, Notepad...) or convertible to Ms. word or excel, other wise hand written will not be preferred.

Requirement: Determine the total dollar borrowing costs for short- and intermediate-term debt under each of the five alternatives for the coming year. (Assume that there are no changes in current liabilities other than borrowings.) Which alternative is lowest in cost?

Brooks Inc., has a seasonal pattern to its business. It borrows under a line of credit from Central Bank at 2 percent over prime. Its total asset requirements now (at year end) and estimated requirements for the coming year are (in millions) Now 1" Quarter 2nd Quarter 3rd Quarter 4th Quarter 2.95 3.25 3.5 3.0 Total Assets $ 2.75 Requirements Assume that these requirements are level throughout the quarter. At present the company has $2.75 million in equity capital plus long-term debt plus the permanent component of current liabilities, and this amount will remain constant throughout the year. The prime rate currently is 10 percent, and the company expects no change in this rate for the next year. Brooks Inc. is also considering issuing intermediate-term debt at an interest rate of 11.5 percent. In this regard, five alternative amounts are under consideration: 50,000, $150,000, $250000, $300000 and $350000. All additional funds requirements will be borrowed under the company's bank line of credit