A Firm with a Stockturn Rate of 5 Sells Products

question 14

Multiple Choice

A firm with a stockturn rate of 5 sells products that cost it $100,000. Its annual inventory carrying cost is about 20 percent of the inventory value. What is its annual inventory carrying cost?

• A) $5,000
• B) $4,000
• C) $8,000
• D) $20,000
• E) $100,000

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Definitions:

Systematic Trends

Patterns or movements in data that consistently occur over a specified period, indicative of a broader phenomenon or change.

Equilibrium Price

The equilibrium price is the market price at which the quantity of goods supplied equals the quantity demanded, leading to a balance in the market.

Market

A space or system in which parties engage in exchange, buying and selling goods and services.

Price

The monetary total projected, essential, or disbursed as payment for an item.