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4. A high-street jewelry store has the

following values on its annual reports:

Cost of Goods Sold = $1.2 million

Average Inventory = $1.4 million

What are the inventory turns for this jewelry store?

(Remember, Inventory Turns = 1/T)

a) 0.86

b) 1.17

c) 1.2

d) 1.4



5. An online (internet only) jewelry store has the following values on its annual reports:

Cost of Goods Sold = $240,000

Average Inventory = $20,000

What are the inventory turns for this jewelry store?

a) 0.08

b) 12

c) 120

d) 20



6. For these jewelry stores (both high street and online), if the cost of carrying inventory is 30% of the

average inventory, what will the savings be comparing the online store to the high street store?

(Use the values for average inventory from the previous two questions.)

a) $1.38 million

b) $414,000

c) $960,000

d) $220,000

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