I have calculated the value in the following problem as $138,082. The answer is $138,158. I guess it is due to rounding errror. Is there any number of digits that we need to set in calculator for decimal point? I also found similar errors in Schweser due to rounding errors. -------------------------- Given the following information about a company: * Sales of $1.2 million * Payables payment period of 60 days * Cost of goods sold equals 70 percent of sales What is the company’s average trade payables using a 365-day year? A) $14,000. B) $138,158. C) $200,000. D) $95,256. Your answer: B was correct! COGS = (.7)($1,200,000) = $840,000 365 days/60 days per payment period = 6.08 for the payables turnover ratio $840,000/6.08 = $138,158
nope no rounding error really i use my calculator with 6 decimal but really you need just 2 for this question the calculation above is correct
I have a abacus at home and it gave me 138082.19 [and that’s why the delay in replying] - Dinesh S
dinesh did your abacus calculate the turnover with a365 day year or 360?
florinpop, mine is a “52-groove 7-beed-each” abacus, So It does not account for leap years and nasty calculations like BDY’s (where 360 day calender is considered). - Dinesh S