Question

AutoSpeed Inc., a reselling firm, buys 50 motorbikes. It stocks 3 motorbikes in Its showroom for daily sales. The selling price of a motorbike is $10,000. As part of selling value to resellers, calculate the inventory turnover of AutoSpeed Inc.

A) 0.06
B) 0.10
C) 0.12
D) Not enough information to determine

Answer 1

To calculate inventory turnover, we need the cost of goods sold, which is not provided in the question.

Step-by-step explanation:

Inventory turnover is a financial ratio that measures how efficiently a company is managing its inventory. To calculate the inventory turnover, we divide the cost of goods sold (COGS) by the average inventory. However, in this case, we are given limited information, as we only know the selling price of the motorbike, not the cost of goods sold. Therefore, it is not possible to determine the inventory turnover based on the given information. The correct answer is D) Not enough information to determine.