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A firm has annual operating outlays of $1,200,000 and a cash conversion cycle of 40 days. If the firm currently pays 10 percent for negotiated

A firm has annual operating outlays of $1,200,000 and a cash conversion cycle of 40 days. If the firm currently pays 10 percent for negotiated financing and reduces its cash conversion cycle to 10 days, the annual savings is

a. $ 6,000.

b. $216,000.

c. $200,000.

d. $10,000.

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