Certified Valuation Analyst (CVA) Practice Exam

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Prepare for the Certified Valuation Analyst exam. Utilize interactive flashcards and multiple-choice questions, each complete with hints and thorough explanations. Gear up to excel in your CVA exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

How many days' sales are in inventory according to the provided information?

100.5 days
150.3 days
190.1 days
220.0 days

The correct answer is: 190.1 days

To determine the number of days' sales in inventory, we typically use the formula: Days' Sales in Inventory = (Average Inventory / Cost of Goods Sold) * 365. The result indicates how many days it would take for a company to sell its current inventory based on its sales levels. A higher number might suggest slower inventory turnover. In this case, the choice of 190.1 days implies that the company has an average inventory level which is relatively high compared to its cost of goods sold. This could indicate that inventory is not being sold off as quickly as expected, reflecting a potential inefficiency in inventory management or a seasonal sales trend. The other options, while they reflect different periods, do not align with the calculations based on the context provided, resulting in the selection of 190.1 days as the most appropriate figure for days' sales in inventory in this scenario.