Question

Case study :
Mr. X wants to buy a business and seeks your help to calculate working capital
requirements in the first year of trading. The following information is given and
you are asked to add 10% for contingencies.
(a) Average amount locked up on stock : Rs.
Stock of finished goods and
work in progress 2,500
Stock of stores, materials 4,000
(b) Average credit given to customers :
Local sales - 2 weeks credit
Outside sales - 6 weeks credit
(c) Time allowed by supplier - 4 weeks
(d) Time allowed for payment of wages - 2 weeks
Prepare a statement showing the working capital requirement.
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Answer 1

Answer:

I think the answer may be d