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ID: 1144008 • Letter: E

Question

e Take a Tes O https://www Explorer Test aspx?testld 1731584348kcenterwin-yes Econ 3001 Wintersession 2017/2018 1/6/18 2:12 PM Quiz: Quiz Chapter 20 Submt Quiz This Question: 1 pt 310132(22comptete) This Quiz: 32 pts possible E Queston Help Suppose that Deil Computer Company starts the year wie $20 million in inventory and ends the year with $14 milion in inventory Inventory Investment for the year for Del will be A -$14 million Suppose that Des Computer Company starts the year with 510 milion in inventory and ends the year with $14 million in inventory Inventory investment for the year for Del wllbe million round your response to the earest milion)

Explanation / Answer

The difference between goods produced (production) and goods sold (sales) in a given year is called inventory investment.

In discrete time, the end-of-period stock(14 millions)of inventories minus the beginning-of-period stock(20 millions) of inventories equals the flow of inventory investment per time period.

A.Inventory investment=14-20=-6millions

B.Inventory investment14-10=4millions