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Zucha Corporation has an inventory period of 55 days, an accounts receivable (A/R) period of 6 days, and an accounts payable (A/P) period of 3 days. The company's annual sales is $182,795. Answer following questions.
(1) How many times per year does the company turn over its inventory?
(2) If the company's cost of goods sold (COGS) is 60 percent of the annual sales, what is its average inventory?
How will the use of safety stock affect the total annual inventory cost?
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