Margetis Inc. carries an average inventory of $750,000. Its annual sales are $10 million, its cost of goods sold is 75% of annual sales, and its average collection period is twice as long as its...

Margetis Inc. carries an average inventory of $750,000. Its annual

sales are $10 million, its cost of goods sold is 75% of annual sales,

and its average collection period is twice as long as its inventory

conversion period. The firm buys on terms of net 30 days, and it pays

on time. Its new CFO wants to decrease the cash conversion cycle by 10

days, based on a 365-day year. He believes he can reduce the average

inventory to $647,260 with no effect on sales. By how much must the

firm also reduce its accounts receivable to meet its goal in the

reduction of the cash conversion cycle?

a. $123,630

b. $130,137

c. $136,986

d. $143,836