Data on Liu Inc

question 94

Multiple Choice

Data on Liu Inc.for the most recent year are shown below,along with the inventory conversion period (ICP) of the firms against which it benchmarks.The firm's new CFO believes that the company could reduce its inventory enough to reduce its ICP to the benchmarks' average.If this were done,by how much would inventories decline? Use a 365-day year.
Cost of goods sold =
$85,000
Inventory =
$20,000
Inventory conversion period (ICP) =
85) 88
Benchmark inventory conversion period (ICP) =
38) 00

• A) $7,316
• B) $8,129
• C) $9,032
• D) $10,036
• E) $11,151

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Definitions:

Social Loafing

The phenomenon where individuals exert less effort when working in a group than when working alone.

Collective Action

Action taken together by a group of people whose goal is to enhance their status and achieve a common objective.

System Justification Theory

A theory suggesting that people have a psychological tendency to defend and justify the status quo, even at the expense of personal or group interest.

Social Identity Theory

Social identity theory is a psychological framework that posits individuals derive part of their identity and self-esteem from the groups to which they belong.