Iqra products (Pvt.) Ltd plans to analyze its cash conversion cycle (CCC). Financial analysts in the company indicates that on average the firm holds items in inventory for 65 days, it generally pays its suppliers after 35 days and collections are done after 55 days of credit sales. The company's annual sales (i.e. on credit only) are about PKR 2.1 billion, its cost of goods sold represent about 67 percent of sales, and purchases represent about 40 percent of cost of goods sold. Assume a 365-day year.

A.How much financial resources does Iqra products (Pvt.) Ltd have invested in

1.Inventory

2.accounts receivable

3.accounts payable

4.CCC

B.If Iqra products (Pvt.) Ltd could shorten its cash conversion cycle by reducing its inventory holding period by 5 days, what effect would it have on its total resource investment found in part A (4)?

C.If IQRA could reduce its CCC by 5 days, would it be best to reduce the inventory holding period, reduce the receivable collection period, or extend the accounts payable period? Why?