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1. Working capital refers to the current assets and current liabilities of a firm. It refers to investments in short-term assets-cash, marketable securities, inventory, and

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1. Working capital refers to the current assets and current liabilities of a firm. It refers to investments in short-term assets-cash, marketable securities, inventory, and accounts receivable. Please explain the factors (price level changes; availability of credit; facility from suppliers; growth and expansion activities and conditions of supply) that affect the level of working capital that firm should maintain! (15 marks) 2. Explain any three Sources of Short-term Finance (Trade Credit, Unsecured Bank Loans, 3. What does it mean to say that maximizing shareholder wealth is a "moral imprative" for managers? 4. Hurkin Manufacturing Company pays accounts payable on the tenth day after purchase. The average Bank Overdrafts or Commercial Papers). (15 marks) (5 marks). collection period is 30 days, and the average age of inventory is 40 days. The firm currently spends about $18 millions on operating cycle investments. The firm is considering a plan that would stretch its account payable by 20 days. If the firm pays 12 percent per yearfor its financing, what annual savings can it realize by this plan? Assume no discount for early payment of trade kredit and a 360- day year. (15 marks) President University, Jababeka Education Park JI. Ki Hajar Dewantara, Kola Jababeka, Cikarang Baru, Bekasi 17550-Indonesia Phone (021) 8910 9762-63, Fax (021) 8910 9768, Email: enrolment@president.ac.id, www.president.ac ld

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