1 Chapter 18 Name: 2 3 The ACME Toy Company has the following information: 4 1. Inventory conversion of 75 days. 5 2. Credit terms to its customers of 30 days. 6 3. Purchase terms of 30 days. 7 4. ACME's annual purchases are $1,000,000 8 9 10 a. Calculate the operating and cash conversion cycles for ACME. 11 b. If ACME extended its purchase terms to 45 and 60 days, how much would it save, assuming a 5% interest rate. 12