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MMLU / A firm's inventory turnover (IT) is 5 times on a cost of goods sold (COGS) of…

Problem

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question

A firm's inventory turnover (IT) is 5 times on a cost of goods sold (COGS) of $800,000. If the IT is improved to 8 times while the COGS remains the same, a substantial amount of funds is released from or additionally invested in inventory. In fact,

choices

  1. $160,000 is released.
  2. $100,000 is additionally invested.
  3. $60,000 is additionally invested.
  4. $60,000 is released.

subject

professional_accounting

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