Primrose Corp has $13 million of sales, $3 million of inventories, $2 million of receivables, and $1 million of payables. Its cost of goods sold is 65% of sales, and it finances working capital with bank loans at an 9% rate. Assume 365 days in year for your calculations. Round intermediate steps to 2 decimal places.
1.What is Primrose's cash conversion cycle (CCC)? Round your answer to two decimal places.
2. If Primrose could lower its inventories and receivables by 9% each andincrease its payables by 9%, all without affecting sales or cost of goods sold, what would be the new CCC? Round your answer to two decimal places.
3. How much cash would be freed-up? Round your answer to the nearest cent.
4. By how much would pre-tax profits change ? Round your answer to the nearest cent.