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Appliance for Less is a local appliance store. It costs this store $24.95 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 604 units. Each order costs $79. The company is using Economic Order Quantity model in placing the orders.
Problem 1: What is the average inventory held during the year including safety stock if the store insists on a 4 days safety stock (assume 365 days a year)?
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The fair value of the equipment on the date of sale was $100,000. Find the amount of revenue to be recognized on this transaction in 2021
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