Question

Uptown Clothiers, Inc. estimates that it costs $12,500 annually to carry the company's inventory of clothing, shoes and accessories. The costs are: 15% for storage, 8% for interest, and 2% for taxes and insurance. What is the value of the inventory in dollars?

Answer 1

$50,000

Explanation:

Let x = value of inventory

Then 0.15x + 0.08x + 0.02x = 12,500

0.25x = 12,500

0.25x/0.25 = 12500/0.25

x = 50,000