Problem 1)

Estimate the net working capital and cash conversion cycle in 2012 for mcdonald's corporation based on the data provided on the data provided in the following chart:

Income Statement for the Period Ending

Income Statement for the Period Ending	12 Months: December 31,2011	12 Months: December 31, 2012
Revenue	27,006.0	27,567.0
Cost of Goods Sold	(16,319.4)	(16,750.7)
Gross Profit	10,686.6	10,816.3
Selling: General and Administrative Expenses	(2,393.7)	(2,455.2)
Operating Income	8,292.9	8,361.1
Net Interest Expenses	(453.8)	(488.6)
Other Net Operating Income (Expenses)	173.1	206.5
EBT, Including Unusual Items	8,012.2	8,079.0
Income Tax Expense	2,509.1	2,614.2
Net Income to Company	5,503.1	5,464.8

Balance Sheet as of	December 31, 2011	December 31, 2012
ASSETS
Total Cash and ST Investments	2,345.1	2,340.3
Accounts Receivable	1,334.7	1,375.3
Inventory	116.8	121.7
Prepaid Expenses	513.7	880.5
Other (Including Current Deferred Tax Assets)	92.7	204.3
Total Current Assets	4,403.0	4,922.1
Net Property, Plant, and Equipment	22,834.5	24,677.2
Long-Term Investments	1,473.0	1,418.6
Goodwill	2,653.2	2,804.0
Deferred Tax Assets, Long-Term	606.3	603.6
Other Long-Term Assets	1,019.9	961.0
Total Assets	32,989.9	35,386.5
LIABILITIES
Accounts Payable	961.3	1,141.9
Accrued Expenses	1,896.6	1,952.2
Current Portion of Long-Term Debt	366.6
Other Current Liabilities (Including Income Taxes Payable)	284.7	309.0
Total Current Liabilities	3,509.2	3,403.1
Long-Term Debt	12,147.8	13,632.5
Other Noncurrent Liabilities (In Deferred Taxes)	2,942.7	3,057.3
Total Liabilities	18,599.7	20,092.9
Total Equity	14,390.2	15,293.6
Total Liabilities and Equity	32,989.9	35,386.5

Problem 2)

Captivate Remodeling is a small, owner-managed construction company. The owner, Bob, typically works on a single residential remodeling project at a time. The business is very simple because Bob does not carry any inventory. The project is completed in four months, on average; thus, Bob can take on three projects each year. The total cost that he bills to his clients averages $400,000, so he books revenues of $1,200,000 per year. After accepting a project, Bob collects the payments from his client in two installments. He collects the first installment of $200,000 at the end of the second month, and the balance of $200,000 at the end of the project (i.e., at the end of four months). Bob