Calculate the exodus increase in free cash flow

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JB Hunt Corp. has annual sales of $80,000,000; its average inventory is $20,000,000; and its average accounts receivable is $16,000,000. The firm buys all raw materials on terms of net 35 days with cost of the good sold $180,000 per day. The firm is searching for ways to shorten the cash conversion cycle. If sales and cost of the good sold can be maintained at existing levels while lowering inventory conversion cycle by 20 days, lowering average collection period by 10 days and postponing its payable to 40 days, calculate the Exodus increase in its free cash flow after the change in its cash conversion cycle.

Reference no: EM132700914

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