1. If a company wished to structure its financing so it repaid funds borrowed only when a project had positive cash flows, it would choose a/an:
1) fully drawn advance
2) term loan
3) interest-only loan
4) deferred payment loan
2. Goniff Steel has $24,000 in assets, consisting of $1,000,000 of temporary current assets, $2,000,000 of permanent current assets, and $1,200,000 of fixed assets. Short-term interest rates are 8% and long-term interest rates are 12%. If long-term financing is perfectly matched with the appropriate assets and the same is true of short-term financing, what is the firm's interest payment?
A. $376,000 B. $456,000 C. $464,000 D. $489,000