Ithaca Iron has annual operating outlays of $3,800,000 and a cash conversion cycle of 50 days. If the firm currently pays 10 percent for negotiated financing and reduces its cash conversion cycle to 45 days, the annual savings is closest to
A) $5,000.
B) $10,000.
C) $26,000.
D) $16,000.

Question

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The Answer of Ithaca Iron has annual operating outlays of $3,800,000 and a cash conversion cycle of 50 days. If the firm currently pays 10 percent for negotiated financing and reduces its cash conversion cycle to 45 days, the annual savings is closest to
A) $5,000.
B) $10,000.
C) $26,000.
D) $16,000.

Ithaca Iron Has Annual Operating Outlays of $3,800,000 and a Cash