Sentrum Sdn Bhd had the following data for 2020 (in millions)

Subject:FinancePrice:2.86 Bought7

Share With

Sentrum Sdn Bhd had the following data for 2020 (in millions). Original Annual sales: unchanged RM110,000 Cost of goods sold: unchanged RM80,000 Average inventory: lowered by RM4,000 RM20,000 Average receivables: lowered by RM2,000 RM16,000 Average payables: increased by RM2,000 RM10,000 Days in year 365 The company plans to implement the following working capital management strategies to improve its liquidity position. (1) Implement a new inventory management system to lower the average inventory by RM4,000 (2) Intensify credit control and collection efforts that could reduce account receivables by RM2,000 (3) Re-negotiate credit to get more favourable credit terms so that account payable can be reduced by RM2,000 The Financial Controller believes that the proposed changes would not affect either sales or the costs of goods sold. Calculate the reduction in the cash conversion cycle of Sentrum Sdn Bhd if these changes were made. [Total: 10 marks