Data on Liu Inc A) $7,316
B) $8,129
C) $9,032
D) $10,036
E) $11,151

question 48

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.
$\begin{array}{lr}\text { Cost of goods sold }= & \$ 85,000 \\\text { Inventory }= & \$ 20,000 \\\text { Inventory conversion period (ICP) }= & 85.88 \\\text { Benchmark inventory conversion period }(\mathrm{ICP}) = & 38.00\end{array}$

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

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Definitions:

Bootstrapping

A statistical method that involves drawing repeated samples from a dataset to estimate a population parameter.

Mean

The mathematical average of a set of numbers, determined by dividing the sum of the values in the set by the number of values.

Median

The middle value in a sorted list of numbers, dividing the data set into two halves.

Trimmed Mean

This is a method of averaging that involves removing a certain percentage of the largest and smallest values before calculating the mean.