A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase inventory by $29,000. It will offer more liberal sales terms, but this will result in average receivables increasing by $84,000. These actions are expected to increase sales by $990,000 per year, and cost of goods will remain at 70% of sales. Because of the firm’s increased purchases for its own production needs, average payables will increase by $54,000. What effect will these changes have on the firm’s cash conversion cycle? (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.)
The cash conversion cycle will decrease increase by days.