Question 3 (20 marks) Working Capital Management: Break- even sales growth rate, payment policy, inventory policy. Green Corp collects 60% of its monthly sales immediately and the rest a month later; its production costs are 80% of sales and it holds two months of inventory. It pays 40% of its bills immediately and the reminder after 30 days. Required: a) (5 marks) What is its break-even sales growth rate? b) (5 marks) Re-calculate the break-even sales growth rate if Green Corp. increases it inventory to three months' sales and offers more lenient credit terms that result in only 40% of its sales being for cash, with the remainder being collected after 30 days. c) (5 marks) It seems simple, let's just pay our bills later say in 60 or 90 days Discuss this statement and the implications of this payment policy decision. d) (5 marks) Keeping lower inventory is the key to increased sales growth rate Discuss this statement and the implications of this inventory policy decision. Question 3 (20 marks) Working Capital Management: Break- even sales growth rate, payment policy, inventory policy. Green Corp collects 60% of its monthly sales immediately and the rest a month later; its production costs are 80% of sales and it holds two months of inventory. It pays 40% of its bills immediately and the reminder after 30 days. Required: a) (5 marks) What is its break-even sales growth rate? b) (5 marks) Re-calculate the break-even sales growth rate if Green Corp. increases it inventory to three months' sales and offers more lenient credit terms that result in only 40% of its sales being for cash, with the remainder being collected after 30 days. c) (5 marks) It seems simple, let's just pay our bills later say in 60 or 90 days Discuss this statement and the implications of this payment policy decision. d) (5 marks) Keeping lower inventory is the key to increased sales growth rate Discuss this statement and the implications of this inventory policy decision