Take a Tes e httpsww ernet Explorer StudentPlayerTestaspxtes

Take a Tes e https//ww ernet Explorer /Student/PlayerTestaspx?testld-1731584348centerwin-yes Econ 3001 Wintersession 2017/2018 1/6/18 1:35 PM Quiz: Quiz Chapter 20 Submt Qutz This Question: 1 pt 160132 (13 complete) This Quiz: 32 pts possible Quest on Help * Suppose that Dell Corporation has 18 000 computers in is warebouses on December 31, 2012, ready to be shipped to merchants (each compuser is valued at S500) By December 31,2013 Del Corporaton has 28,000 compsters ready to be shipped, each valued at $450 Calclate Defs nventory on December 31, 2012 Ders inversory on Doomber 31, 2012 is (Eer our response as a ato\" nimeer) Calcuate Deits etorystment in 2013 What happens to Inventory spendog duing the sarly stages of an econo recession? production agan prsdaction agein

Solution

Debt inventory on 31 dec 2012 is the market value of investment, i.e. 18000*500= 9000000

Debt inventory investment= change in inventory

= 28000*450 - 9000000 = 3600000

B is correct.

During recession sales drop which increases inventory so there is be positive inventory investment but later on firms will cut down production and sell inventory.