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Sharif Manufacturing has sales of Rs. 4 million and a gross profit margin of 40 percent. Its end-of-quarter inventories are as follows: Quarter Inventory 1

Sharif Manufacturing has sales of Rs. 4 million and a gross profit margin of 40 percent. Its

end-of-quarter inventories are as follows:

Quarter Inventory

1 Rs. 400,000

2 800.000

3 1,200,000

4 200,000

i. Find the average quarterly inventory and use it to calculate the firm's inventory

turnover and the average age of inventory.

ii. Assuming that the company is an industry with an average inventory turnover of 2.0,

how would you evaluate the activity of Sharifs' Manufacturing?

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