Question: (Dealer Financing analysis) [25%] . Japer Valley Motor (JVM) is a family-run auto dealership selling both new and used vehicles. In an average month , JVM sells a total of 160 vehicles. New cars account for 60% of sale, while used ones represent 40% of sales. Max has recently taken over the business from his father. Inventory financing was a significant expense for JVM.

1. Examining the dealership’s performance over recent years, Max found that JVM had been turning its inventory (include both new and used cars) at a rate of 8 times per year. What is JVM’s average inventory (in units of cars)?
2. Max has determined that the dealership’s new and used cars have different sales patterns: The turns of the new cars are 7.2 per year, while the turns of used cars are 9.6 per year. Holding a new car in inventory for a month costs JVM about $175, while holding a used car for a month costs roughly $145. Overall, by considering the above 60/40 mixture of sales, what is the average monthly financing cost per vehicle at JVM?

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