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Wilson Electric Company a manufacturer of various types of electrical equipment is examining its working capital investment policy for next year. Projected fixed assets and current liabilities are $20 million and $18 million, respectively. Sales and EBIT are partially a function of the company's investment in working capital particularly its investment in inventories and receivables. Wilson is considering the following three different working capital investment policies:

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The expert examines the working capital for Wilson Electric Company.

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