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Heartland Company's budgeted sales and budgeted cost of good

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Heartland Company's budgeted sales and budgeted cost of goods sold for the coming year are $144,000,000 and $99,000,000 respectively. Short-term interest rates are expected to average 10%. If Heartland can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year, compute its expected cost savings for the coming year.

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Solution Summary

The solution computes the expected cost savings for the coming year.

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Solution:

To arrive at the solution, we need to take COGS / Average Inventory to get the inventory turnover. I will break this one down into steps, so you can see ...

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