A firm with a stockturn rate of 5 that sells products that cost it $150,000 per year is keeping an average of ________ worth of inventory.
A)$75,000
B)$150,000
C)$750,000
D)$4,000
E)$30,000

Question

Quizplus · Accepted Answer

The stockturn rate is the number of times the average inventory is sold in a year.A stockturn rate of 5 implies that the firm requires only $30,000 worth of inventory (150,000 ÷ 5).

A Firm with a Stockturn Rate of 5 That Sells