Kiley Corporation had the following data for the most recent year (in millions). The new CFO believes (1) that an improved inventory management system could lower the average inventory by $4,000, (2) that improvements in the credit department could reduce receivables by $2,000, and (3) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered?

OriginalRevisedAnnual sales: unchanged Original$110,000 Revised $110,000

Cost of goods sold: unchanged Original $80,000 Revised $80,000

Average inventory: lowered by $4,000 Original $20,000 Revised $16,000

Average receivables: lowered by $2,000 Original $16,000 Revised $14,000

Average payables: increased by $2,000 Original $10,000 Revised$12,000

Days in year 365 365

a. 49.8

b. 41.2

c. 37.4

d. 34.0

e. 45.3