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Problems and Cases 10.9 Store-Driven Forecasts. The Home Depot is a leading specialty retailer of hardware and home improvement products and is the second-largest
Problems and Cases 10.9 Store-Driven Forecasts. The Home Depot is a leading specialty retailer of hardware and home improvement products and is the second-largest retail store chain in the United States. It operates large warehouse-style stores. In 2014 and 2015, The Home Depot invested in five new stores. The following table provides summary hypothetical data for The Home Depot. The Home Depot (amounts in millions except number of stores) Number of stores Sales revenues Inventory Capital Expenditures, net 2014 2015 2,269 2,274 $83,176 $11,079 $88,519 $11,809 $ 1,442 $ 1,503 REQUIRED a. Use the preceding data for The Home Depot to compute average revenues per store, capital spending per new store, and ending inventory per store in 2015. b. Assume that The Home Depot will add 10 new stores by the end of Year +1. Use the data from 2015 to project Year +1 sales revenues, capital spending, and ending inven- tory. Assume that each new store will be open for business for an average of one-half year in Year +1. For simplicity, assume that in Year +1, Home Depot's sales revenues will grow, but only because it will open new stores.
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