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Question (4) Kari's Kar Parts has been a borrower at your bank for several years. The owner/manager, Karl Johanssen, dropped by your office to deliver

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Question (4) Kari's Kar Parts has been a borrower at your bank for several years. The owner/manager, Karl Johanssen, dropped by your office to deliver his year-end financial statements. Glancing through them, you noted that both sales and inventory had increased by substantial amounts. You asked Karl if his gross profit margin had changed and what has caused the increase in inventory. He replied that his margins were unchanged and that inventory grew because his volume had grown. Your subsequent review of the income statement confirms that margins are unchanged. Which of the following should you do to analyze the increase in inventory? O Ask Karl for gross profit information by product line. Calculate the impact of the change in accounts payable days on hand. Accept Karl's response as logical and complete and proceed to examine other areas. Calculate any change in Inventory days on hand to determine whether a slowdown in inventory contributed to the increase

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