A Farm Supply Store Starting with a $40,000 Inventory at Cost

Multiple Choice

A farm supply store starting with a $40,000 inventory at cost expects to sell $400,000 (cost of sales) of merchandise in the coming year. It plans to turn over its stock 10 times during the year. How much merchandise must the shop purchase during the year?

A) $200,000
B) $400,000
C) $420,000
D) $440,000
E) None of the above.