1. Temporary working capital is
a. the seasonal borrowing capacity of a firm Incorrect
b. incremental working capital necessary to finance slower than expected collections of customer receivables
c. incremental working capital necessary to support peak activity in seasonal businesses
d. additional payroll cost and expenses incurred during seasonal peaks
2. CNN Corporation needs $750,000 and plans to borrow from its bank under the terms of its line-of-credit arrangement. These terms call for a minimum compensating balance of 12 percent. How much will CNN have to borrow to obtain the needed cash?
a. $750,000
b. $798,307
c. $840,000
d. $852,273