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1. The following is adapted from Financial Management for Executives (2nd ed.): Best Buy Co Inc. reported the following financial information in a recent financial statement ($ millions). Based on the information below, compute the additional working capital financing period. Sales $50,272 Cost of sales 37,611 Inventory 5,897 Accounts receivable 2,348 Accounts payable 4,894

2. The following is adapted from Financial Management for Executives (2nd ed.): La Verne Company reports the sales and collection information below. Assume La Verne Company collects 20 percent of its sales in the month of the sale, 50 percent the next month, 25 percent the following month, and 5 percent is never collected. Compute the companys cash collections for each month from January through April. Nov. Dec. Jan. Feb. Mar. Apr. Sales. . . . $200,000 $325,000 $250,000 $240,000 $260,000 $270,000

3. The following is adapted from Financial Management for Executives (2nd ed.): La Verne Company reports the purchase information below. Assume La Verne Company makes cash payments of 40 percent of its purchases in the month of the purchase and pays the remaining 60 percent the following month. Compute the companys cash payments for each month from January through April. Dec. Jan. Feb. Mar. Apr. Purcahse..... $210,000 $150,000 $170,000 $180,000 $190,000

4. The following is adapted from Financial Management for Executives (2nd ed.): Use the information below, from the La Verne Company, together with the information in Questions 2 and 3, to construct a cash budget for the La Verne Company for January through April. The La Verne Company began January with a cash balance of $100,000. Jan. Feb. Mar. Apr. Miscellaneous cash payments . . . . . $25,000 $30,000 $22,000 $32,000

5. The following is adapted from Financial Management for Executives (2nd ed.): Procter and Gamble (P&G) reports the following information in a recent financial statement (the figures represent millions except for Earnings per share and Dividends per share). Use the below information to compute P&Gs sustainable growth rate for Years 2 and 3 and comment on P&Gs sustainable growth rate relative to its actual rate of growth.

	Year 1	Year 2	Year 3
Sales	$56,741	$68,222	$83,503
Net income	8,684	10,340	12,075
Shareholders equity	62,908	66,760	69,494
Earnings per share	2.79	3.22	3.86
Dividends per share	1.15	1.28	1.45

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