2 & 3

Exercises 1. Determine the net working capital funding needs, given the following: Cash = $15,000 Inventory = $30,000 Average Receivables = $20,000 Average Payables = $25,000 2. Determine the seasonal funding needs, given the permanent NWC funding in problem 1 and the following peak needs: Cash = $15,000 Inventory = $55,000 Average Receivables = $45,000 Average Payables = $25,000 3. How might an aggressive strategy backfire? How might a conservative strategy backfire? When is it best to use each type of strategy? 16.4 Cash Conversion Cycle