The Following Data Were Taken from Castle, Inc

question 84

Multiple Choice

The following data were taken from Castle, Inc.Cost of goods sold $894,000
Inventory, end of year
78,000
Inventory, beginning of the year
92,000
What is (1) the inventory turnover ratio and (2) the number of days' sales in inventory for Castle Inc.

• A)(1) 11.46 times (2) 31.85 days
• B)(1) 10.52 times (2) 34.70 days
• C)(1) 9.72 times (2) 37.56 days
• D)(1) 10.53 times (2) 34.56 days

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Definitions:

Dividend Growth Model

A valuation method that estimates the price of a stock based on the assumption that dividends will increase at a constant growth rate.

Expected Growth Rate

The anticipated rate at which a company, asset, or economy is expected to grow in the future.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Cost Of Capital

The minimum rate of return a company must earn on its investments to maintain its market value and satisfy its investors.