CCC

Primrose Corp has $18 million of sales, $3 million of inventories, $2 million of receivables, and $2 million of payables. Its cost of goods sold is 65% of sales, and it finances working capital with bank loans at an 8% rate. Assume 365 days in year for your calculations. Round intermediate steps to 2 decimal places.

1. What is Primrose's cash conversion cycle (CCC)? Round your answer to two decimal places. days
3. If Primrose could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, what would be the new CCC? Round your answer to two decimal places. days
5. How much cash would be freed-up? Round your answer to the nearest cent. $ By how much would pre-tax profits change? Round your answer to the nearest cent. $