Question 2 DD Bhd is concerned about its cash management. On the average, inventories have an age of 85 days, and accounts receivable are collected in 55 days. Accounts payable are paid approximately 25 days after they arise. The company has annual sales of RM15 million, cost of goods sold of RM8.5 million, and purchase of RM6 million. Assume a 365-day per year. Required: (1) Calculate the firm's operating cycle. (3 marks) (ii) Calculate the cash conversion cycle. (3 marks) (in) Calculate the amount of resources needed to support the company's cash conversion cycle. (Note: round your answer to the nearest 2 decimal digits) m5 marks) (iv) Briefly discuss how management might be able to reduce the cash conversion cycle. (1 marks) Starbuds Sdn Bhd is evaluating a proposal to relax the credit standards to increase annual sales to 30,000 pairs of stocking. Currently, the company is selling 25,000 pairs of stocking per year at an average selling price of RM20 per pair. Bad debt expenses are 1% of sales, the average collection period is 20 days, and the variable cost per unit is RM10. The company expects that if it does relax its credit standards, the average collection period will increase to 25 days and that bad debts will increase to 1.5% of sales. If the company's required rate of return on equal-risk investments is 20%, should the company choose the proposed plan be implemented? Assume a 365-day per year. (Note: round your answer to the nearest 2 decimal digits (13 marks) [Total: 25 Marks]