In 2018, Hidey Company Had Average Inventory of $86,000

question 12

Multiple Choice

In 2018, Hidey Company had average inventory of $86,000. The 2018 income statement showed net sales of $2,200,000 and gross profit of $420,000. In 2017, it was taking the company approximately 30 days to sell its inventory. The company's inventory turnover for 2018 was approximately

• A) 20.7 times.
• B) 2.7 times.
• C) 25.6 times.
• D) 4.9 times.

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Definitions:

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield on government securities.

Inflation Premium

The additional amount investors require on the return of an investment to compensate for the loss of purchasing power due to inflation.

Treasury Bill

Short-term government securities issued at a discount from the face value and maturing at par.

Yield Curve

A line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.