Last year, which is used as the base year, a firm had cash of $52, accounts receivable of $223, inventory of $509, and net fixed assets of $1,107. This year, the firm has cash of $61, accounts receivable of $204, inventory of $527, and net fixed assets of $1,216. What is this year's common-base-year value of inventory?
A) 0.67
B) 0.91
C) 0.88
D) 1.04
E) 1.18

Question

Quizplus · Accepted Answer

The common-base-year value of inventory is calculated by dividing this year's inventory by last year's inventory. So, it's $527 (this year) / $509 (last year) = 1.03536, which rounds to 1.04.

Last Year, Which Is Used as the Base Year, a Firm