The following figures are taken from the financial statements of McDonalds and Wendys. Figures are in million

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The following figures are taken from the financial statements of McDonald’s and Wendy’s.

Figures are in million dollars.

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a. What were McDonald’s inventory turns in this year? What were Wendy’s inventory turns?

b. Suppose it costs both McDonald’s and Wendy’s $3 (COGS) per their value meal offerings, each sold at the same price of $4. Assume that the cost of inventory for both companies is 30 percent a year. Approximately, how much does McDonald’s save in inventory cost per value meal compared to that of Wendy’s? You may assume the inventory turns are independent of the price.

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