Topic 8A Short-term Debt 1. As the finance manager for a growing mining services company, you approach BankWest Limited to discuss their range of business loan facilities. Identify the fundamental principle of finance that relates to the use of both short-term and medium- to longer-term finance by a business. Explain the principle and discuss why it is important. Group 5 2. A fencing contractor purchases a range of fencing materials from the local hardware store in order to build a number of paling fences for a housing project. The hardware store provides its standard trade finance facility to the fencing contractor. Group 1 (a) Explain the operation of trade credit and why the hardware store would provide this type of facility. (b) What are the advantages to the fencing contractor in using trade credit? (c) Calculate the opportunity cost of an invoice that specifies the following conditions: 1.25/10,n/30