The following table includes quarterly working capital levels for your firm for the next year.

	Quarter
($000)	1	2	3	4
Cash	120	120	120	120
Accounts Receivable	228	122	112	702
Inventory	236	1044	580	61
Accounts Payable	127	114	118	121

If you choose to enter the year with $454,000 total in cash and maintain a minimum cash balance of$120,000, what is your maximum short-term borrowing? (Interest rate on short-term debt is 1.2% per quarter.) (Note that $454,00 would be 454 and $120,000 would be 120 in the table because the figures are in thousands in the table.)

Answer: Calculate the temporary working capital for each quarter below: (Round to the nearest integer in the table. Note that all figures in this question are in thousands.)

	Quarter
($000)	Q1	Q2	Q3	Q4
Cash	120	120	120	120
Accounts receivable	228	122	112	702
Inventory	236	1044	580	61
Accounts payable	127	114	118	121
NWC
- Permanent WC needs
Temporary WC needs

Answer: Use the table below to determine the maximum amount of short-term borrowing needed if the firm enters the year with $454,000 in cash and the interest rate on short-term debt is 1.2% per quarter. (Note that $454,000 is 454 in the table. Round to the nearest integer in the table.)

	Quarter
($000)	Q1	Q2	Q3	Q4
Cash at beginning of quarter	454
Minimum cash balance
Temporary working capital needs
Change in NWC	0
Financing
Starting available excess cash
Existing ST Debt	0
Increase (decrease) ST Debt
Total short term borrowing
Ending excess cash
Ending cash balance

Answer: The maximum short-term borrowing occurs in (answer "Q1", "Q2", "Q3", or "Q4") and is $ (,000). (Round to the nearest integer.)