please answer Question B only.

Q2. The following information has been extracted from Refiloe Plc for the past three years. Inventory- Raw materials - Work-in-progress - Finished goods Purchases Cost of goods sold Sales Debtors Trade creditors 2021 M 180 000 93 360 142 875 720 000 1 098 360 1 188 000 297 000 126 000 2020 M 145 800 97 200 129 600 702 000 972 000 1 080 000 259 200 105 300 2019 M 108 000 75 600 86 400 518 400 756 000 864 000 172 800 86 400 The sales director estimates that if the period of credit allowed to customers were reduced to 60days, this would result in a 25% reduction in sales but would probably eliminate about 30 000 per annum bad debts. It would be necessary to spend an additional M20 000 per annum on credit control. Refiloe Plc at present relies heavily on overdraft finance costing 9% per year. Assuming that purchases and stockholdings would be reduced proportionately to the reduction in sales values based on the current year, you are required to: (a). Make appropriate calculations showing the net effect of these changes on investment in working capital. (12 marks) (b). Calculate the increase or decrease in the net annual cashflow of Refiloe Plc. (10marks)