1. What effect will the following events have on the cash conversion cycle?

a.Higher financing rates induce the firm to reduce its level of inventory

b.The firm obtains a new line of credit that enables it to avoid stretching payables to its suppliers.

c.The firm factorsits accounts receivable.

d.A recession occurs, and the firm's customers increasingly stretch their payables.

1. Calculate the accounts receivable period, accounts payable period, inventory period, and cash conversion cycle for the following firm: