A. Plumtree Bhd plans to acquire three new machines amounted to RM350,000 each. It is expected that the new machines will increase the company's productivity as well as its working capital. The company estimates that the working capital will increase by RM500,000. 85% of the working capital is considered to be temporary and the balance is permanent. Plumtree intends to apply for 80% long-term financing and 20% short- term financing to fund the purchase of these machines as well as to fulfill the requirements of the additional working capital.
Required:
a. Determine the financing policy that will be adopted by Plumtree. (Support your answer with workings).​