Sparky's
Sparky's Sells Auto Parts -Sparky's Forecasts That Sales Will Grow by 25% in 2013

question 36

Multiple Choice

Sparky's
Sparky's sells auto parts.Provided below is selected financial information from the company's 2012 annual report:
$\begin{array} { l r r } \text { Fiscalyear end } & 2012 & 2011 \\\text { (amounts in thousands of dollars) } & & \\\text { Net sales } & \$ 125,410 & \$ 106,380 \\\text { Cast of Goods Sold } & - 104,090 & - 8 9 , 3 5 5 \\\text { Grass Prafit } & \$ 21,320 & \$ 17,021 \\\text { Irventory } & \$ 31,353 & \$ 30,850\end{array}$
-Sparky's forecasts that sales will grow by 25% in 2013 and that its cost of goods sold to sales ratio will be the same in 2013 as it was in 2012.If these assumptions prove correct and Sparky's inventory turnover ratio for 2013 is 4.5 what will be the level of inventory at the end of 2013?

• A) $31,353
• B) $26,475
• C) $40,000
• D) $42,314

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Definitions:

Reinforcements

In behavioral psychology, any event that strengthens or increases the likelihood of a behavior repeating.

Systematic Desensitization

A therapeutic method used to reduce phobic or anxiety responses through gradual exposure to the feared object or situation coupled with relaxation techniques.

Gradual Association

The process of forming connections or associations between stimuli or ideas over time, often leading to learned behaviors or understandings.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reward or punishment.