. A new computer system allows your firm to more accurately monitor inventory and anticipate future inventory shortfalls. As a result, the firm feels more able to pare down its inventory levels. What effect will the new system have on working capital and on the cash conversion cycle?

It will require less working capital, means smaller inventory level needs less cash for those inventory. On the other hand, same amount of cash can be used more times (cycles) under the smaller inventory level.

Thank you so much- very helpful