Answer:
new cash conversion cycle 144 days
Explanation:
The cahs conversion cycle is the ime from the inventory is purchased and paid until it is saold and collected.
<u><em>Days inventory outstanding + Day account outstanding - credit line</em></u>
<u><em>Where:</em></u>
COGS:
$50,735,000 x 85% = $ 43,124,750
average inventory (15,012,000 + 13,066)/2
Days invenotry Outstanding: 365 / 3.07 = 119
Then:
Sale $50,735,000
average A/R (10,008,000 + 8,062,000)/2
Days sales outstanding: 365 / 5.61 = 64.99 = 65
Credit will go from 30 days to 40 days
119 + 65 - 40 = 144 days