Syarikat Hankyu Jaya is considering to offer a 3% cash discount to customers that paid within 20 days. Currently, on average it takes the company 60 days to collect from the customers. At present it sales stood at 60,000 units with average selling price of RM50 per unit and variable cost per unit at RM40 per unit. The company expects that by changing the credit terms, it would result increased in sales to 70,000 units, in which 60% will be taking the cash discount. The average collection period is expected to decline to 40 days. If the required rate of return on the equal risk investment is 20 percent, should the company give the cash discount? (Assuming there are 365 days in a year) i ii. Calculate additional profit contribution from sales. Calculate the marginal investment in account receivable. Calculate the cost of cash discount. Calculate net profit or loss in implementing the proposal. (4 marks) (5 marks) (4 marks) (3 marks) iii. iv. b) Harta Diri is analyzing the performance of its cash management. On an average, the firm holds inventory 65 days, pays its suppliers in 35 days, and collects its receivables in 15 days. The firm has a current annual outlay of RM1,960,000 on operating cycle investments. Harta Diri currently pays 10 percent for its negotiated financing. (Assuming a 360 day year.) i. Calculate the firms's Operating Cycle. ii. Calculate the Cash Conversion Cycle. (3 marks) (3 marks) iii. Calculate the daily expenditure and the firm's annual saving if the operating cycle is reduced by 15 days. (3 marks) (Total: 25 marks)