Whitson Co. is looking for ways to shorten its cash conversion cycle. It has annual sales of R36,500,000, or R100,000 a day on a 365-day basis. The firm's cost of goods sold is 70% of sales. On average, the company has R9485364in inventory and R7586543in accounts receivable. Its CFO has proposed new policies that would result in a 21% reduction in both average inventories and accounts receivable. She also anticipates that these policies would reduce sales by 10%, while the payables deferral period would remain unchanged at 32days. All sales are on credit.

Required:

a) What is the cash conversion cycle before implementing the changes?

b) What is the cash conversion cycle after implementing the changes?

c) What effect would these policies have on the company's cash conversion cycle? A reduction in the number of days to be indicated by a "-" sign.