a) **calculate** the firm's **operating** cycle and **cash** conversion cycle.
b) **calculate** the firms **daily** **cash** **operating** **expenditure**. **How** much in resources must be invested **to** support its cahs conversion cycle?

(b) **Calculate** the firm's **operating** cycle (OC). (c) **Calculate** the **daily** **expenditure** and the firm's annual savings if the **operating** cycle is reduced by 15 days.
(a) **Calculate** the firm's **cash** conversion cycle (CCC).

a) **Calculate** the firm's **cash** conversion cycle, its **daily** **cash** **operating** **expenditure**, and the amount of resources needed **to** support its **cash** conversion cycle.

a) **calculate** the firm's **cash** conversion cycle, its **daily** **cash** **operating** **expenditure**, and the amount of resources needed **to** support its **cash** conversion cycle.

FCF = **Cash** flow from operations - Capital **expenditure** - dividend
= 215,000-110,000-60,000 = 45,000 The solution explains **how** **to** **calculate** the free **cash** flow

Dividend/Capitalization rate =.2/.10= $2 per share
New shares **to** be issued= Requirement of funds/2.5= 4million /2= 2 million shares
Requirement of funds= Capital **Expenditure**- **Operating** **cash** inflow= 9-5=$4 million This provides the steps **to** **calculate**

In this we add depreciation and subtract the capital **expenditure**. Since depreciation is equal **to** the capital **expenditure**, the PAT is equal **to** the free **cash** flow.

Item Beginning Ending
Inventory $8,257.00 $10,432.00
Accts Receivable $5,275.00 $5,963.00
Accts Payable $7,685.00 $7,900.00
Net Sales $65,327.00
Cost of goods sold $51,284.00
**Calculate** the **operating** and **cash** cycles.

(use a 360 day year and remember that first, you have **to** **calculate** the **daily** **expenditure**.)

capital
Free **cash** flow is expected **to** grow by 6% per year
Cost of equity is 14%
WACC is 10%
Market value of debt is $3 billion
The company has 200 million shares of common stock outstanding
**Calculate** Free **cash** flow
Free **cash** flow= After