Bio Revolution Corporation is moving with expansion. Available financing is thought of from internal, external equity and debt. Bio Revolution is planning for investment of $19,000,000 project with the current capital structure of 38% debt and 62% equity. Sherry, the finance manager is analyzing different dividend calculation procedure to have guidance for the ultimate payout decision making. In the last year the corp. per share dividend (DPS) was $7.00 and net income was $12,300,000 The firm is going to report Net Income $15,000,000 for this year. Prior to reporting the income statement for this year the company wants to determine its annual dividend. The company has 480000 shares outstanding and its stock trades at $43 per share. So, calculate for Sherry the following (a) Dividend for this year under the same DPS rule. (b) Dividend for this year under the residual dividend income policy. (c) Which option you prefer at this stage (a) or (b) Internal equity or new share which one is preferable for financing capital budgeting by managers and why? Cost of goods sold (COGS) of Merton Corp. is 75% of its sales. It has $14,000, 000 of sales, $2 million of inventories and $1million of payables. Its investment in A/C receivables is 20% of sale. What is the cash conversion cycle (CCC)? At your favorite coffee shop a hot paper cup is served but exactly then you found the coffee cup is soggy and started to (leak). And the same case happened within 15 days of your visit. All signal a mismanagement in one of the areas of working capital can you identify and explain?