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solong [7]
4 years ago
10

Fairchild Garden Supply expects $700 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses thi

s equation to forecast inventory requirements at different levels of sales: Inventories = $30.2 + 0.25(Sales). All dollars are in millions. What is the projected inventory turnover ratio for the coming year?
Business
1 answer:
postnew [5]4 years ago
3 0

Answer:

Forecast sales = 115% x $700 million = $805  million

Inventory = $30.2 million + .25($805 million) = $231.45 million

Inventory turnover = Forecast sales/Inventory

                               = $805 million/$231.45

                               = 3,48 times

Explanation:

Inventory turnover is the ratio of sales to inventory. Inventory is $231.45 million while forecast sales is $805 million. The division of sales by inventory gives inventory turnover.

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5 0
3 years ago
Major Corp. is considering the purchase of a new machine for $5,000 that will have an estimated useful life of five years and no
Mila [183]

Answer:

payback 2.5 years

Explanation:

the payback will be the point in time at which the project cash flow equal the invesmtent.

This method do not consider the time value of money so we don't have to adjust any period cashflow or outflow.

investment: 5,000

increase in cash-flow 2,000

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3 0
3 years ago
Jane Dough Pizza's manager is now getting detailed costs for offering delivery service and needs to properly categorize them as
pashok25 [27]

Answer:

variable costs.

variable costs.

fixed cost

variable costs.

fixed cost

Explanation:

Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments

If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.  

Hourly wage costs and payments for production inputs are variable costs

Variable costs are costs that vary with production

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If no pizzas are delivered, there would be no need for boxes. thus boxes of pizza is a variable cost

the salary of the programmer is not dependent on the level of output. thus it is a fixed cost

3 0
3 years ago
Which of the following does NOT provide for incentives based on standards that are expressed in terms of time period per unit of
Lisa [10]

Answer:

a. Merrick System

Explanation:

Merrick System does not provide for incentives based on standards that are expressed in terms of time period per unit of production

6 0
3 years ago
Purchase discounts are the same as trade discounts true or false
elixir [45]

That statement is false.

They are different. Purchase discounts are given by the sellers to the buyers in order to reduce the amount that the buyers have to pay if they complete the payment within a specific period of time. Trade discount on the other hand, is given by manufacturers to the sellers or re-sellers.

6 0
4 years ago
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