Which of the Following Is the Correct Formula to Calculate

question 102

Multiple Choice

Which of the following is the correct formula to calculate inventory turnover?

• A) Inventory turnover = Cost of goods sold / Average merchandise inventory
• B) Inventory turnover = Cost of goods sold × Average merchandise inventory
• C) Inventory turnover = Cost of goods sold + Average merchandise inventory
• D) Inventory turnover = Cost of goods sold - Average merchandise inventory

---

Definitions:

Consumption Spending

Expenditures by households on goods and services, excluding purchases of new housing.

Income

The money received, especially on a regular basis, for work or through investments.

Investment Accelerator

An economic theory suggesting that an increase in national or private investment spending stimulates overall economic growth, potentially leading to further increases in investment.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit.