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2. (TCO H) Zervos Inc. had the following data for 2008 (in millions). The new CFO believes (a) that. 1 answer below » 2. (TCO H) 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 receivables by $2,000, and (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 changes were made, by how many days would the cash conversion cycle be lowered? Original Revised View complete question » 2. (TCO H) 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 receivables by $2,000, and (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 changes were made, by how many days would the cash conversion cycle be lowered? Original Revised Annual sales: unchanged $110,000 Cost of goods sold: unchanged $80,000 Average inventory: lowered by $4,000 $20,000 Average receivables: lowered by $2,000 $16,000 Average payables: increased by $2,000 $10,000 Days in year 365 a. 34.0 b. 37.4 c. 41.2 d. 45.3 e. 49.8 $110,000 $80,000 $16,000 $14,000 $12,000 365 Attachments: Q.-Attachment….docx View less » Sep 21 2015 03:44 PM
