Pinecrest Company
Use the Selected Data from Pinecrest Company's Financial

question 96

Multiple Choice

Pinecrest Company
Use the selected data from Pinecrest Company's financial statements to answer the following question.
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$\begin{array}{lrr}&2018&2017\\\text { Cash } & \$ 22,000 & \$ 14,000 \\\text { Accounts receivable } & 42,000 & 16,000 \\\text { Merchandise inventory } & 22,000 & 83,000 \\\text { Prepaid expenses } & 23,000 & 18,000 \\\text { Total current assets } & \$ 109,000 & \$ 131,000\\\\\text { Total current liabilities } & \$ 65,000 & \$ 72,000 \\\text { Net credit sales } & 221,000 & 326,000 \\\text { Cost of goods sold } & 168,000 & 299,000 \\\text { Net cash flow from operating activities } & 16,000 & 29,000\end{array}$ ​
-Refer to the data for Pinecrest Company.
Competitors in Pinecrest Company's industry have an average inventory turnover of 20.8 times.Its inventory turnover for 2018

• A)indicates that the company has too little inventory on hand at the end of 2018.
• B)indicates that the company is pricing its products too low.
• C)is equal to the number of days' sales in the company's inventory.
• D)indicates that the market may be reacting to problems in the sales department by reducing demand for the company's products.

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Definitions:

Extensive Form

A representation of games (in game theory) that illustrates the sequence of moves, available strategies, and potential outcomes in a tree diagram.

First-Mover Advantage

The competitive advantage gained by the initial significant occupant of a market segment.

Extensive Form

In game theory, a detailed representation of a game that includes the order of players' moves, their choices at every node, and the outcomes resulting from each combination of choices, displayed as a decision tree.

Simultaneous Game

A strategic situation where each player must make their decisions at the same time, without knowledge of the other players' choices.