Table 6-6 Sam's Wholesale Bikes -Refer to Table 6-6

question 132

Multiple Choice

Table 6-6 Sam's Wholesale Bikes $\begin{array} { | l | l | } \hline \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \\\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \\\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \\\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \\\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \\\hline\end{array}$
-Refer to Table 6-6. What is the gross margin for the two months assuming that Sam's uses the periodic inventory FIFO inventory method?

• A)$4,100
• B)$21,600
• C)$11,600
• D)$18,275

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Definitions:

Net Cash Flows

The difference between a company’s total cash inflows and outflows over a specific period, indicating its ability to generate cash.

Residual Value

Residual value is the estimated amount that an asset will be worth at the end of its useful life.

Time Value

The notion that having money right now is more valuable than receiving the same amount later, owing to the earning potential it carries.

Capital Investment Analysis

The process of evaluating and comparing potential investments or projects to determine their expected returns and the allocation of capital.