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Fairchild Garden Supply expects $730 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements

Fairchild Garden Supply expects $730 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Fairchild Garden Supply expects $730 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements at different levels of sales: Inventories = $30.2 +0.25(Sales). All dollars are in millions. The firm's cost of goods sold is expected to be 75% of sales. What is the projected inventory turnover ratio for the coming year? Do not round intermediate calculations. a. 2.62 times b. 3.04 times c. 3.50 times d. 2.28 times e. 2.96 times
Transcribed Image Text:Fairchild Garden Supply expects $730 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements at different levels of sales: Inventories = $30.2 +0.25(Sales). All dollars are in millions. The firm's cost of goods sold is expected to be 75% of sales. What is the projected inventory turnover ratio for the coming year? Do not round intermediate calculations. a. 2.62 times b. 3.04 times c. 3.50 times d. 2.28 times e. 2.96 times
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