The company can earn an average of 12%0 on risk-free short -term investments whilst the eld from risk-free long-term investments is 16%. The bank charges Lovett an interest rate of 14%on its overdraft, although there is no charge for the unused portion of its overdraft limit. The fixed cost per transaction for long-term investment or disinvestment is 300: the corresponding cost for short-term transfers is about $20• The company can earn an average of 12% on risk-free short-term investments, whilst the yield from risk-free long-term investments is 16%. The bank charges Lovett an interest rate of 14% on its overdraft, although there is no charge for the unused portion of its overdraft limit. The fixed cost per transaction for long-term investment or disinvestment is $300; the corresponding cost for short-term transfers is about $20