At the Beginning of the Year a Company Has $140

question 63

Multiple Choice

At the beginning of the year a company has $140 in inventory and at the end of the year the inventory on the balance sheet is $110.If the firm reports cost of goods sold on the income statement of $400,then the inventory turnover ratio would be closest to:

• A) 1.60
• B) 2.86
• C) 3.20
• D) 3.64

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Definitions:

Required Reserve Ratios

Regulatory requirements determining the minimum fraction of customer deposits that commercial banks must hold as reserves, rather than loan out.

Discount Rate

Discount Rate is the interest rate charged by central banks on loans they offer to commercial banks or the rate used to discount future cash flows to their present value.

Federal Reserve District Banks

Regional banks making up the Federal Reserve System, responsible for implementing monetary policy and banking regulations in their respective districts.

Member Banks

Banks that are part of a central bank system like the Federal Reserve System in the United States and are subject to its regulations and have access to its services.