A firm has a cash conversion cycle of 60 days. Annual outlays are $12 million and the cost of negotiated financing is 12 percent. If the firm reduces its average age of inventory by 10 days, the annual savings is __________.
A) $144,000
B) $104,000
C) $40,000
D) $28,800

Question

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The Answer of A firm has a cash conversion cycle of 60 days. Annual outlays are $12 million and the cost of negotiated financing is 12 percent. If the firm reduces its average age of inventory by 10 days, the annual savings is __________.
A) $144,000
B) $104,000
C) $40,000
D) $28,800

A Firm Has a Cash Conversion Cycle of 60 Days