. . Total current assets: $2,200,000 Total current liabilities: $1,200,000 Cash: $300,000 Inventory: $1,000,000 Accounts Receivable: $800,000 Accounts Payable: $500,000 Net sales is $10,000,000 Variable cost (VCR) is 30% of sales Cost of Goods Sold (COGS) at 40% of sales Average daily cash flow $27,000 Standard deviation of cash flow is $40,000 Its ROE is 25% Total earnings of $500,000, dividend payout of $150,000. Its cost of capital is 7% Line of credit available: $500,000 Its credit terms from supplier is Net 35 (DPO) Its credit terms to customer is Net 45 (DSO) Expenses for credit administration and collection is 5% of sales EXP(-05/CP) Daily interest rate (i) is 7%/365 Collection period for sale is 45 days (CP) t makes the following forecast for 2019: Revenues increase by 10% from 2018 level; Receivables will be 8% of revenues; Inventory will equal to 10% of revenues; Payables are expected at 5% of revenues. 1. A) Explain the Cash Conversion Cycle (CCC). b) Calculate its DIH, DSO and DPO. C) Calculate its operating cycle d) Calculate its CCC. 2> AFNWC calculation: a) What will be the sales level for 2019? b) What will be the inventory, receivable and payable increase for 2019, based on the sales forecast. c) What will be the additional funds needed for working capital (AFNWC)