Hello tutor please given Financial accounting question answer do fast and properly explain all answer Innovative Electronics Inc. carries an average annualinventory of $5 million. The company estimates thecost of capital at 8%, storage costs at 6%, and riskcosts at 4%. What does it cost per year to carry thisinventory?

Step 1: Definition of Inventory Carrying CostsInventory carrying costs refer to the total expenses a…

Answered: Innovative Electronics Inc. carries an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What does it cost per year to carry this inventory?
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Innovative Electronics Inc. carries an average annual inventory of $5 million. The company estimates the cost of capital at 8%, storage costs at 6%, and risk costs at 4%. What does it cost per year to carry this inventory?