1. The following information is provided for two annual periods. What is the Cash Conversion Cycle in terms of days for each year and develop 2 questions you would pose to management about their Cash Conversion Cycle? Year 1 Year 2 % Change Average Accounts Receivable $150,000 $175,000 16.7% Average Inventory $250,000 $250,000 0.0% Average Accounts Payable $60,000 $80,000 33.3% Sales for year $1,500,000 $1,500,000 0.0% Cost of Goods Sold for the year $700,000 $800,000 +14.3%

2. Your opportunity cost is 8.0 % and you are given the following 3 credit terms from your suppliers. Determine the implicit interest rate (opportunity cost) of each discounted terms and determine which discounts you will take based upon the terms and opportunity cost of funds. 2.5/10 net 90, 1/5 net 60, .75/10 net 45

3. You are trying to determine the break-even analysis to cover your fixed costs. The information you have is the following Fixed costs: $40,000 Variable cost per unit: $4.50 Total units sold: 20,000 What selling price per unit must you get in the market to break-even? What variable is this this projects gross margin most sensitive to assuming a 10% change in Variable cost, fixed cost, units sold or price per unit using the breakeven price as the base?

4. You are trying to determine the degree of leverage for 2 firms to determine which firm has the highest Operating Leverage, Financial Leverage and Total Leverage. Identify which firm has the highest degree of each type of leverage; Operating, Financial and Total. Which one would you invest in and why? FIRM A 2020 2021 Sales $1,000,000 $1,200,000 EBIT $250,000 $350,000 Net Income $100,000 $150,000 FIRM B 2020 2021 Sales $2,000,000 $2,200,000 EBIT $175,000 $350,000 Net Income $ 75,000 $150,000