The Working Capital Management Case Study Dell Computer Corp. manufactures. sells and services personal computers. The Company markets its computers directly to its customers and builds computers after receiving a customer order. This build-to-order model enables Dell to have much smaller investment in working capital than its competitors. It also enables Dell to enjoy the benefits of reduction more fully in component prices and to introduce new products more quickly. Dell has grown quickly and has been able to finance that growth internally by its efficient use of working capital and its profitability.

Questions:

(I) How was Dell's working capital policy a competitive advantage?

(ii) Assuming Dell sales will grow 50%, how might the company fund this growth internally? What steps do you recommend the company take?

(iii) How would your answers to Question (ii) change if Dell also repurchased $100 million of ordinary shares and repaid Its long-term debt?