For the most recent financial year, Company W had annual sales and cost of sales of $530 million and $400 million, respectively. In addition, the company ended the year with $52 million in inventory, $6 million in accounts receivables, and $54 million in accounts payables. Assume 365 days in a year.

(a) Calculate the cash cycle for Company W.

(b) Under what circumstances will the cash cycle be negative? What does it mean?

(c) The CFO of Company W says that it is always in the best interest of the company to reduce its cash cycle. True or false? Explain.

(d) Suppose the median firm in Company Ws industry has inventory, receivables, and payables periods of 100, 15, and 30 days, respectively. Is Company W likely to have a flexible or restrictive short-term financial policy? Justify your answer.

(e) Company W is either one of the largest retailers in the world or an automobile manufacturer using a just-in-time system. Which is Company W more likely to be? Justify your answer.