1. A company has total annual sales (all credit) of $400,000 and a gross profit margin of 20 percent. Its current assets are $80,000; current liabilities, $60,000; inventories, $30,000; and cash, $10,000.How much average inventory should be carried if management wants the inventory turnover to be 4?
2. You have a choice of receiving Rs. 25,000, six years from now or Rs. 50,000, twelve years from now. At what implied annual interest rate should you be indifferent between the two ?