What is the Company expected savings due to the increase

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Question - The following data are taken from the records of Chikoy Corporation for the year 2014:

Sales $25,200,000

Cost of Sales $14,400,000

Inventory Turnover 9 times per year

For 2015, budgeted sales and cost of sales are the same as in 2014 actual data, although the Company will try to increase its inventory turnover to 12 times per year. If short-term interest rates are expected to average at 8%, what is the Company's expected savings due to the increase in inventory turnover?

a. $400,000

b. $700,000

c. $32,000

d. $56,000

Reference no: EM132544418

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