Lelita Bhd is analysing the length of time taken to cover its investment in operating assets. On average, the firm pays its accounts payables in 30 days and collects its receivables in 40 days. The firm inventory turnover is six times a year. The firm has an annual cost of RM7,200,000 on operating cycle investments. The interest of its financing is 10% per annum. (Assume a 360-day a year).

a) Calculate the firm`s cash conversion cycle (3 marks)

b)Evaluate the length of the firm's new cash conversion cycle if the firm plans to increase its profit by RM50,000. (5 marks)