Network Solutions just introduced a new, fully automated manufacturing plant that produces 2,000 wireless routers per day with materials costs of $45 per router and no other costs. The average number of days a router is held in inventory before being sold is 68 days. In addition, they generally pay their suppliers in 30 days, while collecting from their customers after 23 days.

a.What is the cash conversion cycle?

b.What would happen to the cash conversion cycle if they could stretch their payments to suppliers from days to days?

c.How much would working capital be reduced if they stretched their payments to suppliers from days to days?

a.The cash conversion cycle is 61 days. (Round to the nearest whole number.)

b.If they could stretch their payments to suppliers from 30 days to 50 days, the cash conversion cycle would be 41 days. (Round to the nearest whole number.)

c. If they stretched their payments to suppliers from 30 days to 50 days, the working capital would be reduced by $ ??????. (Round to the nearest dollar.)