Ithaca Iron Has Annual Operating Outlays of $1,800,000 and a Cash

Multiple Choice

Ithaca Iron has annual operating outlays of $1,800,000 and a cash conversion cycle of 60 days. If the firm currently pays 12 percent for negotiated financing and reduces its cash conversion cycle to 50 days, the annual savings is closest to

A) $60,000.
B) $10,000.
C) $6,000.
D) $16,000.