Zervos Inc. had the following data for 2008 (in millions). The new CFO believes (a) that an improved inventory management system could lower the average inventory by $4,000, (b) that improvements in the credit department could reduce recievables by $2,000 (c) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these chagnges were made, by how many days would the cash conversion cycle be lowered?,, Original Revised,,Annual sales: unchanged ,Cost of goods sold: unchanged $110,000 $110,000,Average inventory: lowered by $80,000 $ 80,000,4,000,Average recievables: lowered by $20,000 $16,000,$2,000 $16,000 $14,000,Average payables: increased by $10,000 $12,000,$2,000 ,Days in year 365 365,,A. 34.0,B. 37.4,C. 41.2,D. 45.3,E. 49.8
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