Answer:
planning
Explanation:
The management process in any organization consists of four main and primary function that the managers of the organization needs to focus and perform. They are :
planningorganizingleadingcontrollingPlanning means to define the performance goals for the company and determining the plans and strategies in order to achieve that goal.
In the context, Tim Amstrong, who leads the integrated Yahoo!/AOL subsidiary is going to set a new strategic direction for the company. For this, he needs to focus on planning new organization goals and form new strategies to achieve them.
Thus he should focus on the planning of the four principal management functions.
20. Calculating Loan Payments You want to buy a new sports coupe for $78,500, and the finance office at the dealership has quoted you a loan with an APR of 4.9 percent for 60 months to buy the car. What will your monthly payments be
Answer:
$1,477.80
Explanation:
Calculation to determine What will your monthly payments be
First step is to calculate the Present value of annuity of 1 using this formula
Present value of annuity of 1 = (1-(1+i)^-n)/i
Where,
i= 4.9%/12 =0.00408333333
n=60
Let plug in the formula
Present value of annuity of 1=(1-(1+0.00408333333)^-60)/0.00408333333
Present value of annuity of 1=53.11957022
Now let calculate the Monthly payment using this formula
Monthly payment = Loan amount / Present value of annuity of 1
Let plug in the formula
Monthly payment= $ 78,500.00 / 53.11957022
Monthly payment= $1,477.80
Therefore your monthly payments will be $1,477.80
Monthly payments for the car loan = $1,476.72
To calculate your monthly loan payments, one can use the formula for calculating the monthly payment on an amortizing loan. The formula is:
[tex]P = (Pv * r) / (1 - (1 + r)^{-n})[/tex]
Where:
P = Monthly payment
PV = Present value (loan amount)
r = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments
Given:
Loan amount (PV) = $78,500
Annual interest rate = 4.9%
Loan term (n) = 60 months
First, calculate the monthly interest rate (r):
r = 4.9% / 100 / 12 = 0.00408
Next, substitute the values into the formula and solve for P:
[tex]P = (78,500 * 0.00408) / (1 - (1 + 0.00408)^{-60})[/tex]
[tex]P = 320.08/(1-(1.00408)^{-60}[/tex]
P = 320.08/1-0.78325
P = 320.08/0.21675
P = $1,476.72
Thus, your monthly payments for the car loan would be approximately $1,476.72.
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a sale is made at a lumber company for goods costing a total of $13,359 (which includes 9.5% sales tax). in the books of the lumber company revenue should be credited for what amount
Answer:
$12,200
Explanation:
Sales including sales tax = $13,359
Sales tax rate = 9.5%
Let the sales be = $X
Sales tax payable = Sales * Sales tax rate
Sales tax payable = X * 9.5%
Sales tax payable = 0.095X
Sales + Sales tax = Sales including sales tax
X + 0.095X = 13,359
1.095X = 13,359
X = 13,359/1.095
X = $12,200
So, Sales = $12,200. Thus, in the books of the lumber company, Revenue should be credited for $12,200
A ______ establishes a company's financial and strategic objectives, and provides a set of guidelines for achieving the desired results. Multiple choice question. mission statement strategic inflection strategic plan strategic vision\
Answer:
strategic plan
Explanation:
In Business management, a strategy can be defined as a set of guiding principles, actions and decisions that an organization combines so as to achieve its business goals, attract customers and possess a competitive advantage over its rivals in the industry.
Typically, to formulate strategies that are well aligned with the mission of an organization or business firm, some of the activities that needs to be performed includes the following;
1. Knowing your core competencies: this involves identifying your strengths such as knowledge, technology, underlying skill, experience, ability or process that enables you to perform exceptionally and provide a unique set of products or services that meets the needs of your customers.
2. Assessment of the organization's internal strengths and weaknesses: it gives an organization certain advantages, edge and disadvantages in meeting the needs of various customers by analyzing their strengths, weaknesses, opportunities and threats (SWOT).
3. Examination of the organization's external environment: this involves examining and identifying all the factors outside of an organization that affects its performance such as customers, government policies, competitors etc.
4. Analyze your competitors: organization should ensure they are always a step ahead of the their competitors in the industry.
In conclusion, a business strategy or strategic plan sets the overall direction for an organization or business because it focuses on defining how a business would achieve its goals, objectives, and mission; as well as the funds and material resources required to implement or execute the business plan.
Combining Supply and Demand
Scenario: The following shows a demand and supply schedule listing CDs demanded and supplied in the
millions) per week at each price. Graph each the following demand/supply schedules on one demand graph
and then answer the questions below:.
$6
Shortage/
Surplus
(Qs - Qd)
$5
$4
Price Per Quantity Quantity
Compact Demanded Supplied
Disc (Qd) (Qs)
$6
o
9
$5
2
6
$4
3
5
$3
4
4
$2
6
3
$1
9
0
$3
$2
$1
1
2 3 4 5 6 7 8
9 10 11 12 13 14
Answer:
the answer is $3
Explanation:
Digby's Elite product Dug has an awareness of 72%. Digby's Dug product manager for the Elite segment is determined to have more awareness for Dug than Andrews' Elite product Able. She knows that the first $1M in promotion generates 22% new awareness, the second million adds 23% more and the third million adds another 5%. She also knows one-third of Dug's existing awareness is lost every year. Assuming that Able's awareness stays the same next year (77%), out of the promotion budgets below, what is the minimum Digby's Elite product manager should spend in promotion to earn more awareness than Andrews' Able product
Explanation:
would you still like me to help you with this question
She knows that the first $1M in promotion generates 22% new awareness, the second million adds 23% more and the third million adds another 5%.
What is a promotion?Promotion in marketing is any sort of marketing communication that aims to persuade target audiences of the relative qualities of a given good, service, idea, or brand.
This place can be either cognitive or emotional. Promoting a product or service is intended to raise brand awareness, spark interest, enhance sales, or foster brand loyalty.
One of the fundamental components of the market mix, which also consists of the four Ps (product, pricing, location, and promotion), is this. It aids marketers in establishing a memorable spot in clients' minds.
Promotion includes the communication strategies a marketer does to spread knowledge about its goods. Visual and verbal information can both be conveyed.
One of the components of the promotional mix or promotional plan is promotion. These include event marketing, exhibits, and trade shows, as well as personal selling, advertising, sales promotion, direct marketing, publicity, and word of mouth.
A promotional strategy outlines the importance of each component of the promotional mix as well as how much of the budget should be devoted to each component.
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Primare Corporation has provided the following data concerning last month’s manufacturing operations.
Purchases of raw materials $30,000
Indirect materials used in production $4,520
Direct labor $58,100
Manufacturing overhead applied to work in process $87,400
Underapplied overhead $4,190
Inventories Beginning Ending
Raw materials $11,300 $19,200
Work in process $54,700 $69,900
Finished goods $33,600 $43,600
Required:
a. Prepare a schedule of cost of goods manufactured for the month.
b. Prepare a schedule of cost of goods sold for the month.
Answer:
Results are below.
Explanation:
To calculate the cost of goods manufactured, we need to use the following formula:
Cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
Cost of goods manufactured= 54,700 + (11,300 + 30,000 - 19,200) + 58,100 + 87,400 - 69,900
Cost of goods manufactured= $152,400
Now, the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 33,600 + 152,400 - 43,600
COGS= $142,400
If you wish to accumulate $125,000 in 7 years, how much must you deposit today in an account that pays a quoted annual interest rate of 11% with quarterly compounding of interest
Answer:
You need to deposit $58,481.53 today.
Explanation:
a) Data and Calculations:
Future value expected = $125,000
Period of investment = 7 years
Interest rate = 11% compounded quarterly
The amount of deposit needed today to earn $125,000 in 7 years at annual interest rate of 11% is calculated as follows:
N (# of periods) 28
I/Y (Interest per year) 11
PMT (Periodic Payment) 0
FV (Future Value) 125000
Results
PV = $58,481.53
Total Interest $66,518.47
Given the following information, calculate the effective gross income: property: 4 office units, contract rents per unit: $2,750 per month; vacancy and collection losses: 18%; operating expenses: $41,000; capital expenditures: 11%.
Answer:
the effective gross income is $117,480
Explanation:
The computation of the effective gross income is shown below:
= Gross income - vacancy income
= ($2,750 × 4 units × $12) - ($2,750 × 12 × 4 × 11%)
= $132,000 - $14,520
= $117,480
hence, the effective gross income is $117,480
The same is to be considered and relevant
The financial statements report the cumulative impact of all transactions recorded as of the financial statement date. Input the cumulative amount of a) Net Income (Loss), b) Total Assets, c) Total Liabilities, and d) Total Equity that would be reported on the financial statements immediately after each transaction is recorded.
Answer:
True
Explanation:
Financial statements reports the impact of all business transactions that occur. These transaction are recorded when they incur and then any necessary adjustment is made in order to reflect the true expense or liability. the adjusting entries are passed to correctly record the transaction.
answer the following about break even analysis. New city day care center operates from Monday to friday. it has fixed expenses of $5,000 per week and charges each child who attends the program $15 per day. It costs the center $5 per day for supplies and snacks fro each child. How many children must come ot the center each day for it to break even
Answer:
500 children
Explanation:
Break even point is the level at which a firm makes neither a profit nor a loss. In other words the point where Profit = $ 0.
Break even (units) = Fixed Costs ÷ Contribution per unit
Therefore,
Break even (children) = $5,000 ÷ ($15 - $5)
= 500
500 children must come to the center each day for it to break even.
Investment X offers to pay you $4,020 per year for 12 years, whereas Investment Y offers to pay you $2,041 per year for 7 years. How much higher is the present value investment X if the discount rate is 11 percent? Round to nearest whole number.
Answer:
$16,481.68
Explanation:
Note that the present value of each yearly cash inflow can be determined using the formula provided below:
PV of cash inflow=cash inflow/(1+discount rate)^n
n is the year in which the cash inflow is expected, it is 1 for year 1 cash inflow, 2 for year 2 and so on.
PV of Investment X=$4,020/(1+11%)^1+$4,020/(1+11%)^2+$4,020/(1+11%)^3+$4,020/(1+11%)^4+$4,020/(1+11%)^5+$4,020/(1+11%)^6+$4,020/(1+11%)^7+$4,020/(1+11%)^8+$4,020/(1+11%)^9+$4,020/(1+11%)^10+$4,020/(1+11%)^11+$4,020/(1+11%)^12
PV of investment X=$26,099.27
PV of investment Y=$2,041/(1+11%)^1+$2,041/(1+11%)^2+$2,041/(1+11%)^3+$2,041/(1+11%)^4+$2,041/(1+11%)^5+$2,041/(1+11%)^6+$2,041/(1+11%)^7
PV of investment Y=$9,617.59
the difference in PV=$26,099.27-$9,617.59
the difference in PV=$16,481.68
You have $25,832.81 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account totals $210,000. You expect to earn 10% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.
Answer: 14 years
Explanation:
The question states that an individual has $25,832.81 in a brokerage account, and plan to deposit an additional $4,000 at the end of every future year until the money in the account totals $210,000 and it's expected to earn 10% annually on the account.
To know the number of years that it'll take to reach the goal, we'll solve this in Excel as:
= =NPER (10%,-4000,-25832.81, 210000).
= 14 years
Therefore, it'll take 14 years to reach the goal.
The dollar amount by which total rent exceeds base rent under a percentage lease for retail is referred to as:
Answer:
vacancy
Explanation:
Vacancy. The dollar amount by which total rent exceeds base rent under a percentage lease for retail is referred to as. Overage rent.
"Consider the following data: Cost of goods sold $70 Direct labor $20 Direct materials used $15 Cost of goods manufactured $80 Work in process ending $10 Finished goods ending $15 Actual overhead $32 OH allocated at 150% of DL$. Show all computations. a) Prepare a schedule of COGM & Sold using OH allocated. b) Prepare the journal entry to close OH."
Answer:
Schedule of cost of goods manufactured & Sold
Particulars Amount
Direct materials used $15
Direct labor $20
Factory overhead Applied $30
(150% of DL Cost)
Total manufacturing costs $65
Add: Beginning WIP $25
Total cost of work in process $90
Less: Ending WIP $10
Cost of goods manufactured $80
Particulars Amount
Cost of goods manufactured $80
Add: Beginning finished goods inventory $5
Cost of goods available for sale $85
Less: Ending finished goods inventory $15
Cost of goods sold $70
The First National Bank has total deposits of $675,000 and excess reserves of $22,300. If the required reserve ratio is 9 percent, the First National Bank has total reserves of:
Answer: $83050
Explanation:
Based on the information given in the question, the total reserves of First National Bank will be given as follows:
Total deposit = $675000
The Required reserve ratio will be:
= 675000 × 9%
= 675000 × 9/100
= $60750
Since the bank has excess reserves of $22,300, then the total reserve will be:
= $60750 + $22300
= $83050
Book Values versus Market Values In preparing a balance sheet, why do you think standard accounting practice focuses on historical cost rather than market value
Answer:
Historical costs is objectively and precisely measured, whereas market values can be difficult to estimate, and different analysts would come up with different
values.
Explanation:
In preparing a balance sheet it is customary for a company to value the assets and other items based on historical costs rather than market values.
For example if an asset is purchased at $20,000, this value will reflect in the balance sheet in subsequent years. Or future calculation will be based on this.
Let's say yearly depreciation is $1,000 then after on year the value will be $19,000, after two years $18,000 and so on.
This is more object than market value which varies at any one time.
Market value for an item will vary depending on location and the market.
Based on your analysis, you prepared a report with several inferences. While proofreading, you come across the following inference. Consider this case: Recapitalization might increase the EPS, but the price per share remains the same. Is the statement true or false
Answer: True
Explanation:
Recapitalization refers to a process where a company alters its capital composition. For instance, it can acquire more debt whilst reducing its equity holdings.
Recapitalization can affect the number of shares that a company has and the weight of those shares in relation to debt but it does not change the price of the stock so this statement is true.
Which of the following are potential problems with using the minimum wage as a poverty-fighting tool? Choose one or more: A. Lower-income workers will earn more. B. There will be more lower-skilled workers entering the labor force looking for work and more jobs for them. C. There will be a shortage of workers in low-wage jobs. D. Employers might shift to more capital-intensive production because labor is relatively more expensive. E. Fewer low-income workers will be employed.
Answer:
D. Employers might shift to more capital-intensive production because labor is relatively more expensive.
E. Fewer low-income workers will be employed
Explanation:
Minimum wage is the lowest amount by law that an employer can pay to its employees. This can be used as a tool to fight poverty.
However when there is a minimum wage set, the cost of labour will be higher for employers.
There will be a tendency for employers to move to a more capital intensive production in order to reduce the cost of wages.
Also since low income earners are the beneficiaries of minimum wage, employers will tend to hire less of them and more of the higher earning workers.
The job or low income earners can be mechanised.
The following information relates to the Stockton Company:Paid note payable$ 150Bought equipment260Depreciation expense500Net income6,000Paid dividends500Issued bonds payable1,100Issued common stock900Sold land2,400What is the net cash provided by financing activities
Answer:
$1,350
Explanation:
Financing Activities are those activities that involve raising capital or debt as well as repayment to holders of such instruments.
Cash flow from financing activities :
Paid note payable ($150)
Paid dividends ($500)
Issued bonds payable $1,100
Issued common stock $900
Net cash provided by financing activities $1,350
therefore,
the net cash provided by financing activities is $1,350
An economy has an aggregate demand shortfall of $1200 billion and a GDP gap of $900 billion. The mpc is 2/3. The appropriate fiscal policy to eliminate the gap, using G alone, would be to
Answer:
Change in government expenditure needed = 300
Explanation:
Multiplier 'k' = Change in Income / Change in Govt. expenditure = dY / d GE = 1 / ( 1-MPC )
Desired change in Y, ie GDP = 900 billion , MPC = 2 / 3.
k = 1 / ( 1 - 2/3 ) = 1 / ( 1/3 ) = 3
3 = 900 / d GE
d GE = 900 / 3 = 300
Change in government expenditure = 300
g Jill has a balance of $866,000 in her retirement savings account. She expects to retire in 8 years. She will not save any additional money until she retires, but what she has in savings now will earn 9% for the next 8 years. Bob has a balance of $482,000 in his retirement savings and he also wants to retire 8 years from now. He plans to save money every year for the next 8 years so that he will have exactly as much money as Jill does 8 years from now. If he earns the same rate on his savings as Jill, how much will he have to save each year for 8 years to catch up with Jill
Answer:
$69,378.96
Explanation:
The first step is to determine the future value of Jill's balance
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$866,000(1.09)^8 = $1,725,559.25
the second step is to determine the future value of the balance in Bob's account
$482,000(1.09)^8 = $960,415.19
The difference between Jill and Bob's future value amount is 765,144.06. this has to be the future value of bob's yearly savings
yearly savings = 765,144.06. / annuity factor
Annuity factor = {[(1+r)^n] - 1} / r
(1.09^8 - 1) / 0.09 = 11.028474
765,144.06. / 11.028474 = $69,378.96
what is the major difference between money markets and capital markets: One is more domestic while the other is more international
Answer:
The major difference between money markets and capital markets is:
the time horizon of the debt instruments.
Explanation:
A money market is a global financial market for the exchange of short-term debts (or debt instruments that mature in less than or equal to one year). A capital market is also a global financial market for the exchange of long-term debt instruments (or securities that mature in more than one year). Additionally, the capital market, unlike the money market, enables the exchange of equity securities (common stocks and preferred stocks). Principally, the major difference is the time horizon provided by the two markets.
Recall that since stocks have really long lives, in the video we first imagined owning a stock for only one period. In this simple, yet powerful scenario, today's stock price is the PV of next year's dividend and next year's stock price.) The stock of Alydar Oil, an all-equity firm, is currently trading at $30 per share, after just having paid a $2.60 per share dividend. The market expects a dividend of $3.30 per share to be paid one year from today. If the equity cost of capital (same as discount rate for equity) is 13% for this firm, the expected ex-dividend price (the stock price after the dividend is paid next year) in one year (t = 1) should be closest to:_______.a) $32.77b) $30.60c) $33.90d) $31.30
Answer:
Option b ($30.6) is the correct option.
Explanation:
Given:
Current price,
= $30
Required rate,
= 13%
Expected dividend,
= 3.30
Now,
The expected ex-dividend will be:
= [tex]Current \ price\times (1+ Required \ rate) - Expected \ dividend[/tex]
On putting the values, we get
= [tex]30\times (1+13 \ percent)-3.30[/tex]
= [tex]30\times 1.13-3.30[/tex]
= [tex]33.9-3.30[/tex]
= [tex]30.6[/tex] ($)
You are evaluating a potential investment in equipment. The equipment's basic price is $176,000, and shipping costs will be $3,500. It will cost another $17,600 to modify it for special use by your firm, and an additional $8,800 to install it. The equipment falls in the MACRS 3-year class that allows depreciation of 33% the first year, 45% the second year, 15% the third year, and 7% the fourth year. You expect to sell the equipment for 30,900 at the end of three years. The equipment is expected to generate revenues of $151,000 per year with annual operating costs of $77,000. The firm's marginal tax rate is 35.0%. What is the after-tax operating cash flow for year 1
Answer:
$71,881.45
Explanation:
The after-tax operating cash flow for year 1 is simply the net income plus depreciation for year 1 since depreciation needs to be added back to net income as it is not a cash outflow in the actual sense.
net income=(revenue-annual operating costs-depreciation)*(1-tax rate)
revenue=$151,000
annual operating costs=$77,000
depreciation expense for year 1=($176,000+$3,500+$17,600+$8,800)*33%
depreciation expense for year 1=$67,947.00
tax rate=35.0%
net income=($151,000-$77,000-$67,947)*(1-35%)
net income=$3,934.45
after-tax operating cash flow for year 1=$3,934.45+$67,947.00
after-tax operating cash flow for year 1= $71,881.45
MacGyver Company bought equipment on January 3, 20X1, for $34,100. At the time of purchase, the equipment was estimated to have a useful life of 6 years and a salvage value of $620. Using the straight-line method, the amount of one year's depreciation is
Answer:
$5,580
Explanation:
Straight line method charges a fixed amount of depreciation for each and every year the asset is in use in the business.
Depreciation expense = (Cost - Salvage Amount) ÷ Estimated useful life
therefore,
Depreciation expense = ($34,100 - $620) ÷ 6
= $5,580
Using the straight-line method, the amount of one year's depreciation is $5,580.
Swiss Furniture Company manufactures bookshelves and uses an activity-based costing system to allocate all manufacturing conversion costs. The following information is provided for the month of May:
Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base
Materials handling $6,300 Number of parts 9,100 parts
Assembling $14,000 Number of parts 9,100 parts
Packaging $2,680 Number of bookshelves 910 bookshelves
Required:
Each bookshelf consists of 10 parts. The direct materials cost per bookshelf is $32.What is the total manufacturing cost per bookshelf?
Answer:
Total unitary manufacturing cost= $57.25
Explanation:
First, we need to calculate the activities rates:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 6,300/9,100= $0.69 per part
Assembling= 14,000/9,100= $1.54 per part
Packaging= 2,680/910= $2.95 per bookshelve
Each bookshelf consists of 10 parts. The direct materials cost per bookshelf is $32.
Now, we can allocate conversion costs to each unit:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Materials handling= 0.69*10= $6.9
Assembling= 1.54*10= $15.4
Packaging= 2.95*1 = $2.95
Total allocated costs per unit= $25.25
Finally, the total unitary manufacturing cost:
Total unitary manufacturing cost= 32 + 25.25
Total unitary manufacturing cost= $57.25
Yuan recently completed his college degree and is entering the labor market for the first time. He has been submitting applications and has been interviewed twice in the last two weeks, but so far has not found a job. Yuan could be classified as
Answer:
Frictionally unemployed.
Explanation:
Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;
I. Natural Rate of Unemployment (NU).
II. Cyclical unemployment rate (CU).
III. Structural unemployment rate (SU).
IV. Actual unemployment rate (AU).
V. Frictional unemployment rate (FU).
Frictionally unemployed describes a situation where an individual isn't able to secure a job briefly as a result of changes in the demand for labor among different organizations.
Hence, Yuan could be classified as frictionally unemployed (search unemployment) because it's based on circumstances surrounding him.
A business buyer purchases toner, paper, and staples from a seller of office supplies. What form does the seller need to use to inform the buyer about the payment owed for this purchase?
A. A receipt
OB. An invoice
C. A purchase order
OD. A packing slip
I'm pretty sure it is b because invoice is a record that keeps track of orders and cost
Synergy Inc. has reported the following operating information for one of its divisions: Sales revenue $150,000 Operating income $30,000 Operating assets $375,000 Calculate the division's margin, turnover, and ROI.
Answer:
Division's margin = 20%
Turnover = 40%
Return On Investment = 8%
Explanation:
Given:
Sales revenue = $150,000
Operating income = $30,000
Operating assets = $375,000
Find:
Division's margin
Turnover
Return On Investment
Computation:
Division's margin = [Operating income / Sales revenue]100
Division's margin = [30,000 / 150,000]100
Division's margin = 20%
Turnover = [Sales revenue / Operating assets]100
Turnover = [150,000 / 375,000]100
Turnover = 40%
Return On Investment = Division's margin x Turnover
Return On Investment = 20% x 40%
Return On Investment = 8%
Refer to the following selected financial information from McCormik, LLC. Compute the company's inventory turnover for Year 2.
Year 2 Year 1
Cash $37,500 36,850
Short-term investments 90,000 90,000
Accounts receivable, net 85,500 86,250
Merchandise inventory 121,000 117,000
Prepaid expenses 12,100 13,500
Plant assets 388,000 392,000
Accounts payable 113,400 111,750
Net sales 711,000 706,000
Cost of goods sold 390,000 385,500
a) 4.72.
b) 4.33.
c) 3.28.
d) 5.78.
e) 3.86.
Answer:
c) 3.28.
Explanation:
Computation for the company's inventory turnover for Year 2.
Using this formula
Inventory Turnover = Cost of Goods Sold / Average Inventory
Let plug in the formula
Inventory Turnover=$390,000/[($121,000+ $117,000)/2]
Inventory Turnover=$390,000/$238,000/2
Inventory Turnover=$390,000/119,000
Inventory Turnover=3.277
Inventory Turnover= 3.28 (Appropriately)
Therefore the company's inventory turnover for Year 2 is 3.28