Question 10:

Analyze the cash conversion cycle for a retail company using the following data:

• Days Inventory Outstanding (DIO): 45 days
• Days Sales Outstanding (DSO): 30 days
• Days Payables Outstanding (DPO): 60 days

Requirements:

1. Calculate the Cash Conversion Cycle (CCC).
2. Discuss the implications of the CCC for the company’s liquidity.
3. Suggest strategies to improve the CCC.

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Question 1

A manufacturing company is considering a project that requires an initial investment of $200,000. The expected net cash flows for the project are given below. Assume the company's cost of capital is 8%. Calculate and comment on the project's NPV, IRR, and discounted payback period.

Year	Cash Flows	Discount Factor (8%)
1	$50,000	0.926
2	$50,000	0.857
3	$50,000	0.794
4	$60,000	0.735
5	$60,000	0.681
Salvage Value	$30,000	0.681

Requirements:

1. Calculate the Net Present Value (NPV).
2. Determine the Internal Rate of Return (IRR).
3. Compute the discounted payback period.
4. Provide a brief commentary on the investment decision based on NPV and IRR.