Use the Following Information Regarding Black Company and Red Company

question 160

Multiple Choice

Use the following information regarding Black Company and Red Company to answer the question "Which amount is equal to Black Company's "days in inventory" for 2022 (to the closest decimal place) ?" $$\begin{array}{l}\begin{array} { | l | c | c | c | } \hline & \text { Year } & \begin{array} { c } \text { Inventory } \\\text { Turnover }\end{array} & \text { Ending Inventory } \\\hline \text { Black Company } & 2020 & & \$ 26,340 \\\hline & 2021 & 8.7 & \$ 29,890 \\\hline & 2022 & 8.4 & \$ 30,100 \\\hline\\\hline \text { Red Company } & 2020 & & \$ 25,860 \\\hline & 2021 & 7.0 & \$ 24,750 \\\hline & 2022 & 7.5 & \$ 22,530 \\\hline\end{array}\end{array}$$

• A)43.5 days
• B)52.1 days
• C)48.7 days
• D)42.0 days

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Definitions:

Residual Income Claimants

Individuals or entities entitled to the income that remains after all other expenses and obligations have been met, typically referring to owners or shareholders.

Operational Efficiency

The ability of an organization to minimize inputs and costs while maximizing outputs and services.

Market Rate

The prevailing price or interest rate for goods, services, or securities in a competitive market.

Principal-Agent Problem

A dilemma in which an agent (employee or representative) may not act in the best interest of the principal (employer or client) due to differing objectives and information asymmetry.