Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following table shows financial data (year 2019) for Dirt Cheap Wholesale and Kwiki-Mart, two US retailers: Dirt Cheap Wholesale Kwiki-Mart Stores Inventories ($millions) 5293

The following table shows financial data (year 2019) for Dirt Cheap Wholesale and Kwiki-Mart, two US retailers:

Dirt Cheap Wholesale Kwiki-Mart Stores
Inventories ($millions) 5293 41525
Sales (net $millions) 59158 396050
COGS ($ millions) 51986 332418

Assume that both companies have an average annual holding cost rate of 15%, and stores operate 365 days per year.

How much lower is, on average, the inventory cost for Dirt Cheap compared to Kwiki-Mart of a household cleaner valued at $4 COGS?

Assume that the unit cost of the household cleaner is the same for both companies and that the price and the inventory turns of an item are independent.

(Report your answer in $ to three decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Pillars Of Finance The Misalignment Of Finance Theory And Investment Practice

Authors: G. Fraser-Sampson

2014th Edition

1137264055, 978-1137264053

More Books

Students also viewed these Finance questions

Question

8. Explain the contact hypothesis.

Answered: 1 week ago

Question

2. Define the grand narrative.

Answered: 1 week ago