11. Home Depot and Lowes are two American home improvement firms with a large number of...

 

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11. Home Depot and Lowes are two American home improvement firms with a large number of retail stores that sell tools, home appliances, construction products and services. If you search for their financial performance, you find the following figures (in thousands) in their 2018 income statements and balance sheets. Total revenue Cost of revenue Gross profit Inventory Lowes 68,619,000 45,210,000 23,409,000 11,393,000 Home Depot 100,904,000 66,548,000 34,356,000 12,748,000 One of the products that both companies sell is a table saw which is sold for $499 in both stores. Suppose that both companies buy the table saw from the same supplier at the same price. If it costs both companies $75 to keep one table saw in inventory for 1 year, which company makes more profit selling a table saw? How much more? Assume that other operating costs are the same for each table saw for both companies. 11. Home Depot and Lowes are two American home improvement firms with a large number of retail stores that sell tools, home appliances, construction products and services. If you search for their financial performance, you find the following figures (in thousands) in their 2018 income statements and balance sheets. Total revenue Cost of revenue Gross profit Inventory Lowes 68,619,000 45,210,000 23,409,000 11,393,000 Home Depot 100,904,000 66,548,000 34,356,000 12,748,000 One of the products that both companies sell is a table saw which is sold for $499 in both stores. Suppose that both companies buy the table saw from the same supplier at the same price. If it costs both companies $75 to keep one table saw in inventory for 1 year, which company makes more profit selling a table saw? How much more? Assume that other operating costs are the same for each table saw for both companies.

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