16. Al\'s Sport Store has sales of $897,400, costs of goods sold of $628,300, in

Question

16. Al's Sport Store has sales of $897,400, costs of goods sold of $628,300, inventory of $208,400, and accounts receivable of $74,100. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? a. 74.19 days b. 84.76 days c. 121.07 days d. 138.46 days e. 151.21 days 17. The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of $365,000, and a profit margin of 5.20 percent. What is the return on assets? a. 6.22 percent b. 6.48 percent c. 7.02 percent d. 7.78 percent e. 9.79 percent

Explanation / Answer

16)

Days to sell inventory:

= Inventories×365÷Cost of Goods Sold

= $208.400×365/$628,300

= 121.07

Hence, correct option is (c) 121.07 days

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