a) What are the two major sources of spontaneous short-term financing for a firm? How do their balances behave relative to the firm's sales?

b) Fauzan's fishing products is analyzing the performance of its cash management. On average, the firm holds inventory for 65 days, pays its suppliers in 35 days, and collects receivables in 15 days. The firm has a current annual outlay of RM1,960,000 on operating cycle investments. Fauzan currently pays 10 percent for its financing. (Assume a 360-day year) i. Calculate the firm's cash conversion cycle ii. Calculate the firm's operating cycle iii. Calculate the daily expenditure and the firm's annual savings if the operating cycle is reduced by 15 days.

c.) Layang Incorporation uses 800 units of a product per year on a continuous basis. The product has carrying costs of RM250 per unit per year and order costs of RM300 per order. It takes 30 days to receive a shipment after an order is placed and the firm requires a safety stock of 5 days usage in inventory.

i. Calculate Layang Incorporation's economic order quantity (EOQ) ii. Calculate Layang Incorporation's reorder point. (Assume a 360-day year)