P18.4 M/s. POR and Co. have approached their bankers for their working capital requirement, who has agreed to sanction the same by retaining the margins as under : Raw Materials 20% Stock-in-process Finished goods 25% Debtors 10%From the following projections for next year you are required to work out : (1) the working capital required by the company and (it) the working capital limits likely to be approved by bankers Estimated for next year : Annual sales Rs. 14.40,000 Cost of production 12,00,000 Raw materials purchases 7.05,000 Monthly expenditure 25,000 Anticipated opening stock of raw materials : 1.40,000 Anticipated closing stock of raw materials : 1.25,000 Inventory norms : Raw material 2 months Work-in-progress 15 days Finished goods I month The firm enjoys a credit of 15 days on its purchases and allows one month credit on its supplier. On sales orders the company has received an advance of Rs. 15,000. State your assumptions, if any. [Answer : Working capital Rs. 350.625, Loan to be approved at Rs. 3,32,750.]