QUESTION 2 [25 MARKS] Galaxy Tennis Ball Club purchases tennis balls at P20 per dozen from its suppliers. The Galaxy Club will sell 40,300 dozens of tennis balls evenly throughout the year. The total cost to handle a purchase order is P10. The insurance, property tax and rent for each dozen tennis balls in the average inventory is P0.40. The Club wants a 5% return on average inventory investment. Required: a. Compute the economic order quantity. (9 marks) b. Compute the total annual inventory expenses needed to sell 40,300 dozens of tennis balls if orders are placed according to economic order quantity computed in part 1. (6 marks) c. Explain any five limitations of the Economic order quantity. (10 marks) QUESTION 3 [25 MARKS] Use the given information about BBB Pty Ltd to answer the questions that follow: Sales P10, 000,000 Average inventories P2, 000,000 Cost of goods sold P8, 000,000 Receivables P666, 667 Average Accounts payable P666, 667 Required: a. Define the cash conversion cycle. (2 marks) b. Calculate BBBs Average Age of Inventory. (4 marks) c. Calculate BBBs Average Collection Period. (4 marks) d. Calculate the Accounts Payable Period. (4 marks) e. Calculate the BBBs cash conversion cycle. (4 marks) f. Advise BBB on what they should do to reduce their cash conversion cycle. (3 marks) g. Explain two strategies that BBB can use to fund its cash conversion cycle requirements. (4 marks)