(c) The position of sales revenue, current assets and current liabilities of a firm during 2020 and 2021 is given below:

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2020 2021

Sales revenue 600,000 660,000

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Cash 8 000 8 800

Trade Receivables 70 000 91 000

Stock 80 000 96 000

Total current assets 158 000 195 800

Trade Payables 40 000 48 000

Net working capital 118 000 147 800

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The expected increase in sale from 2021 to 2022 is 20%. However, the growth in each of the current assets and current liabilities is expected to double in 2022 from the growth during 2020 to 2021.

Required

Determine:

1. the growth in current assets and current liabilities in 2021 from 2020 and in 2022 from 2021, and
2. Estimate requirement of additional working capital for 2022. (20 marks)
3. Describe different costs associated with inventory and also explain the relationship between costs associated with inventory and state how this affects inventory decisions. (6 marks)