Assume That Zybo, Inc

question 45

Multiple Choice

Assume that Zybo, Inc. has sales of $10 million and inventory of $2 million. The corporation utilizes the percent-of-sales method of financial forecasting. If Zybo is expected to generate sales of $14 million next year, what will the firm's investment in inventory be?

• A) $1.4 million
• B) $2.0 million
• C) $2.8 million
• D) None of the above

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Definitions:

Stock Market

A public market for buying and selling equity securities and derivatives, where companies can raise capital and investors can trade shares.

Capital Gains

The profit earned from the sale of an asset, such as stock or real estate, which has increased in value over the time it was held.

Interest Rates

The cost of borrowing money or the reward for saving money, expressed as a percentage of the amount borrowed or saved.

Corporate Profits

The earnings of corporations after expenses and taxes have been deducted.