A Company Reported the Following Information Regarding Its Inventory

question 169

Multiple Choice

A company reported the following information regarding its inventory. Beginning inventory: cost is $70,000; retail is $130,000
Net purchases: cost is $65,000; retail is $120,000
Sales at retail: $145,000
The year-end inventory showed $105,000 worth of merchandise available at retail prices. What is the cost of the ending inventory?

• A) $48,300.
• B) $56,700.
• C) $56,441.
• D) $78,300.
• E) $105,000.

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Definitions:

Equity Financing

The process of raising capital through the sale of shares in a company.

WACC

The Weighted Average Cost of Capital represents a formula used to assess a company's cost of capital, with each type of capital being weighted according to its proportion.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to discount a future investment.

Risk Class

Categories of assets or investments grouped together based on the level of risk and return characteristics they possess.