Kiley Corporation had the following data for the most recent year. The new CFO believes that an improved inventory management system could lower the average inventory by $4000, that improvements in the credit department could reduce receivables by $2000, and that the purchasing department coudl negogite better credit termsanf thereby increase accounts payable by $2000. Futhermore, 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 tbe cadh conversion cycle be lowered?
Original. Revised Annual sales: $110000. $110000 unchanged COGS: unchanged. $80000. $80000 Average inventory: $20000. $16000 lowered by $4000 Average receivables: $16000. $14000 lowered by $2000 Average payables: $10000. $12000 increase by $2000 Days in year. 365. 365