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      Question

      A manufacturing unit has Raw Material holding of 60

      days, WIP of 30 days, Finished Goods of 45 days and Receivables of 75 days. Payables period is 60 days. Annual cost of production is β‚Ή360 crore. What is the Working Capital requirement based on Operating Cycle?
      A β‚Ή120 crore Correct Answer Incorrect Answer
      B β‚Ή135 crore Correct Answer Incorrect Answer
      C β‚Ή150 crore Correct Answer Incorrect Answer
      D β‚Ή165 crore Correct Answer Incorrect Answer
      E β‚Ή180 crore Correct Answer Incorrect Answer

      Solution

      Operating Cycle = 60 + 30 + 45 + 75 – 60 = 150 days Daily cost = 360 / 365 β‰ˆ 0.986 WC β‰ˆ 0.986 Γ— 150 β‰ˆ β‚Ή148–150 crore

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