Use the Information Below to Answer the Following Questions

question 9

Multiple Choice

Use the information below to answer the following questions:
Saw Ltd’s inventory at 1 July 2011 was $16 300, and at 30 June 2009 it was $23 700. Sales for the year ended 30 June 2012 were $125 000 and the gross margin was 20%.
-What was the number of days' inventory on hand?

• A) 73 days
• B) 69.5 days
• C) it cannot be calculated from the information provided
• D) 50 days.

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Definitions:

Adverse Selection

A situation where asymmetric information leads to the selection of undesirable participants in a transaction or contract, often seen in insurance markets.

Consumer Surplus

The divergence between the total sum consumers are inclined and able to disburse for a merchandise or service, and the total sum they actually disburse.

Negative Externality

A cost that affects a party who did not choose to incur that cost, often associated with production or consumption activities.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits that could have been received if a different decision were made.