Precision Photo Equipments manufactures professional photographic equipment. The case brings up the following issues for discussion: 1) how to estimate the incremental working capital requirement on a change in the activity level in respect of various items the company is manufacturing; 2) the implications of a change in the price level of inputs as also of output on the working capital requirement; 3) the increase in the cost of finance on the cost of various products; 4) fixation of commission for the distributors and its relationship between the period of credit allowed; and 5) the connotation of spareable cash flows and its relationship with ordinary cash flows.