LG$2$

P$15-2$ Changing cash conversion cycle Camp Manufacturing turns over its inventory five times each year, has an average payment period of $35$ days, and has an average collection period of $60$ days. The firm has annual sales of $$3\mathrm{.}5$ million and cost of goods sold of $$2\mathrm{.}4$ million.

a$.$ Calculate the firm's operating cycle and cash conversion cycle.

b$.$ What is the dollar value of inventory held by the firm?

c$.$ If the firm could reduce the average age of its inventory from $73$ days to $63$ days, by how much would it reduce its dollar investment in working capital?