Question 3 Working capital Management] a Identify from the following working capital policies (see Figure in Page 4) into their types, namely, aggressive, moderate and conservative. Also identify their impact on profitability. liquidity and risk using descriptions like High Average, Low Type Impact on Profitability Impact on Liquidity Impact on Risk Policy A Policy B Policy C Give reasons for your answer on impact of a particular working capita policy on profitability. liquidity and risk ASSET LEVEL ($) Policy A Policy B Policy C 1. Current Assets O 25,000 OUTPUT (units) 50,000 b. X Inc. wants to know working capital by operating cycle methods when : Estimated Sales 25,000 units Production and Sales will remain similar throughout the year Production costs: Materials 3 per unit, Labor 1.20 per unit Overheads $18,200. Customers are given 45 days credit. 45 days' supply of raw materials and 30 days' supply of finished goods are kept in store. Production cycle is 15 days. All materials are issued at the commencement of each production cycle. 1/4 on an Average of working capital is kept as cash balance for contingencies. Estimate gross working capital applying average operating cycle. Take 1 year =365 days