Cash conversion cycleAmerican Products is concerned about managing cash efficiently. On theaverage, inventories have an age of 75

75 days, and accounts receivable are collected in 34

34 days. Accounts payable are paid approximately 30

30 days after they arise. The firm has annual sales of about $36

36 million. Cost of goods sold are $18

18 million, and purchases are $17

17 million.

a.Calculate thefirm's operating cycle. (Round to the nearest wholenumber.)

b.Calculate thefirm's cash conversion cycle. (Round to the nearest wholenumber.)

c.Calculate the amount of resources needed to support thefirm's cash conversion cycle. (Round to the nearest wholenumber.)

d.Discuss how management might be able to reduce the cash conversion cycle.