QUESTION 4 GBC Corp. has annual sales of RM100,000,000 with cost of goods sold of RM50,735,000 and maintains an average inventory level of RM15,012,000. The average accounts receivable balance outstanding is RM10,000,000. The company makes all purchases on credit and has always paid on the 30th day. The company is now going to take full advantage of trade credit and pay its suppliers on the 40th day. If sales can be maintained at existing levels but inventory can be lowered by RM1,946,000 and accounts receivable lowered by RM1,946,000, what will be the net change in the cash conversion cycle? (Assume there are 365 days in the year.) Required: a) Calculate the new and old inventory period (IP) (6 marks) b) Calculate the new and old account receivable period (ARP) and (6 marks) c) Determine the net change in the cash conversion cycle? (8 marks) (Total: 20 marks] QUESTION 3 Sapphire Project and Jade Project of equal risk are alternative for expanding Sinaran Company Capacity The firms cost of capital is 13%. The initial investment and cash flows associated with these projects are shown in the following table. Initial Investment (CF) Sapphire Project Jade Project Year() Cash inflows (CF) RM 0 1 2 -365,000 38,000 47,000 62,000 455,000 -40,000 20,300 15,200 14,100 11,200 3 a) b) c) Calculate the payback period for each project. Which investment will you choose? Why? (5 marks) Calculate the net present value (NPV) for each project. Which investment will you choose? Why? (8 marks) Calculate the profitability Index (PI) for each project. Which investment will you choose? Why? (5 marks) Based on your answers in (a) through (c), which project will you finally choose? Explain why? (2 marks) [Total: 20 marks] d)