2 . A firm has arranged for a lockbox system to reduce collection time of accounts receivable . Currently* the film has an average collection period of 43 days , an average age of inventory of 50 days , and an average payment period of 10 days . The lockbox system will reduce the average collection period by three days by reducing processing , mail , and clearing float . The film has total annual outlays of $15. 000, 000 and currently pays 9 percent for it's negotiated financing . ( a) Calculate the cash conversion cycle before and after the lockbox system . ( 6 ) Calculate the savings in financing costs from the lockbox system . Level of Difficulty : 3 Learning Goal : ? Topic : Lockbox System and the Cash Conversion Cycle ( Equation 13 . 2 and Equation 13 . 3 )