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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 74
Determining the Effects of Inventory Management Changes on Inventory Turnover
Ratio
Indicate the most likely effect of the following changes in inventory management on the inventory turnover ratio (+ for increase, - for decrease, and NE for no effect).
____ a. Parts inventory delivered daily by suppliers instead of weekly.
____ b. Shorten production process from 10 days to 8 days.
____ c. Extend payments for inventory purchases from 15 days to 30 days.
Ratio
Indicate the most likely effect of the following changes in inventory management on the inventory turnover ratio (+ for increase, - for decrease, and NE for no effect).
____ a. Parts inventory delivered daily by suppliers instead of weekly.
____ b. Shorten production process from 10 days to 8 days.
____ c. Extend payments for inventory purchases from 15 days to 30 days.
Explanation
Verified
Verified
Inventory turnover ratio reflects the nu...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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