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) $104,000.
B) $144,000.
C) $28,800.
D) $40,000.

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) $104,000.
B) $144,000.
C) $28,800.
D) $40,000.

A Firm Has a Cash Conversion Cycle of 60 Days