Lunar Calendar Company is analyzing the performance of its cash management department. The firm has inventory which turns 7.

Lunar Calendar Company is analyzing the performance of its cash management department. The firm has inventory which turns 7.2 times per year, an average payment period of 40 days, and an average collection period of 60 days. The firm’s total annual outlays are $2,500,000. (Assume a 365-day year.)