Lisa Pinto, financial analyst at the advertising company Roche, wants to improve the administration of the company's working capital, for which she is considering, among other measures, granting a discount for prompt payment at the company of 2%, and get the following information:

The average payment period of the company is currently 25 days.

The average inventory period (EPI) is currently 120 days.

The average collection period is currently 60 days.

The total variable cost of the current company is 75% of sales and will continue like this in the future.

The following changes are expected when granting a discount for prompt payment of 2%:

The average collection period would be reduced to 42 days.

The average inventory period (EPI) would be 85 days. Sales would increase from $ 13750,000 to $ 15,000,000.

Uncollectible account expenses would remain unchanged and the 2% discount that would be offered, 75% of the company's budgeted sales would take advantage of.

The company believes that it can negotiate with a new provider, an average payment period of 40 days. The company currently invests $ 12,000,000 annually in its operating cycle, that is, it requires approximately $ __________ every day of the year. Lisa knows that the company pays 12% annual interest on investments in net working capital, as it is its required rate of return.

1. Calculate for Roche the savings per cycle by modifying the CCC with the proposal. Use a year of 365 days.