1. Watts Industries' carries 108 days in Inventory, and collects its Accounts Receivable in 42 days. If the firm pays its Accounts Payable in 16 days, what is Watts' Cash Conversion Cycle?

2. Break-even Financing. Lakeland, Inc., is a U.S.?based MNC with a subsidiary in Mexico. Its Mexican subsidiary needs a one?year loan of 10 million pesos for operating expenses. Since the Mexican interest rate is 40 percent, Lakeland is considering borrowing dollars, which it would convert to pesos to cover the operating expenses. By how much would the dollar have to appreciate against the peso to cause such a strategy to backfire? (The one?year U.S. interest rate is 6%.)