As a result of the outstanding work, you have been doing at the company, your manager has placed you on the HIGH potentials list of employees. Only those employees that demonstrate high ethical standards can be considered for such an honor. You are grateful that you were able to avoid the temptation of plagiarizing on Final Exams, and always conducted yourself in an honest and ethical manner. Your manager wants you to answer the following questions and show all your work. (a) Luxor Ltd. had Gross sales of $600,000 with discounts and rebates totaling $100,000. Cost of Goods sold were $270,000. The company had average payables of $65,000, average inventory of $90,000 and average receivables of $120,000. Calculate both the Operating and Cash cycles and interpret the results (7 points) (b) Based on your answer in (a) is Luxor Ltd. More likely to be in the manufacturing or retail industry? Explain why the operating and cash cycles are important to a company and what can an organization do to improve? (3 marks) (c) Keating's Savings and Loans Inc. has granted Luxor Ltd., a line of credit that allows it to borrow up to $85 million at any time. The interest rate is 0.95% per month. But Luxor Ltd. is required to have 3.5% of the borrowed amount deposited in a non-interest- bearing account. Assume the bank uses compound interest on its line of credit loans, what is the effective annual interest rate on this lending arrangement? (7 points)