The following information is available for Splish Brothers Inc. for three recent fiscal years. 2022 2021 2020Inventory $580,000 $590,000 $320,000Net sales 1,950,000 1,750,000 1,350,000Cost of goods sold 1,462,500 1,228,500 938,000Calculate the inventory turnover, days in inventory, and gross profit rate for 2022 and 2021. 2022 2021Inventory Turnover times timesDays in Inventory days daysGross Profit Rate % %

In 2021:

Inventory Turnover for 2021: 2.7 times

Days in inventory: 135.19 days

Gross Profit Rate: 29.8%

In 2022:

Inventory Turnover for 2022: 2.5 times

Days in inventory: 146 days

Gross Profit Rate: 25%

Explanation:

Inventory turnover ratio is calculated by using following formula:

Inventory turnover ratio = Cost of Goods Sold/Average Inventory

Average Inventory =  (Inventory beginning of year + Inventory end of year )/2

In the company:

Average Inventory for 2021 = ($590,000 + $320,000)/2 = $455,000

Average Inventory for 2022 = ($580,000 + $590,000)/2 = $585,000

In 2021:

Inventory Turnover for 2021 = $1,228,500/$455,000 = 2.7 times

Days in inventory = 365/Inventory Turnover = 365/2.7 = 135.19 days

Gross Profit Rate = Gross profit/net sales = (Net Sales - Cost of goods sold)/Net Sales = ($1,750,000 - $1,228,500)/$1,750,000 = 0.298 = 29.8%

In 2022:

Inventory Turnover for 2022 = $1,462,500/$585,000 = 2.5 times

Days in inventory = 365/Inventory Turnover = 365/2.5 = 146 days

Gross Profit Rate = Gross profit/net sales = (Net Sales - Cost of goods sold)/Net Sales = ($1,950,000 - $1,462,500)/$1,950,000 = 0.25 = 25%

the answer is a. $209,000

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.