Trevor retailers has got an inventory of 8 times per year, an average creditor's payment of 40 days and a debtors collection period of 60 days. The firm annual sales are R 16 million. Assume a 365-day year

Required

(a) Calculate the Firm's cash conversion cycle (CCC), its daily cash operating expenditure and the amount of resources needed to support the CCC.

(b)Calculate the new CCC if the firm makes the following changes simultaneously

• Shorten the average age of inventory by 6 days
• Speed up the collection of debtors by 5 days
• Take on average 7 days longer to pay creditors

( c) if the firm pays 9% for resources, by how much if anything could it increase profit if it makes the changes in (b) above?