XYZ Company has $967,000 in paid-in capital, retained earnings of $57,950 (including the current years earnings), and 30,500 shares of common stock outstanding. In the current year, it has $34,000 of earnings available for the common stockholders. XYZ is a single product company, selling 250,000 products per year. Each product has a variable operating cost of $3.75 and sells for $4.15. Fixed operating costs are $66,000. XYZ turns over its inventory six times each year, has an average payment period of 65 days, and has an average collection period of 40 days.

c.Assuming there is no difference in the investment per dollar of sales in inventory, receivables, and payables and that there is a 360-day year; calculate the XYZ Companys operating cycle and cash conversion cycle. Also calculate the firms daily cash operating expenditure. How much in resources must be invested to support its cash conversion cycle?