Is there a way to automatically add interest onto inventory that is being held? For instance the cost would go up on specified inventory items daily, at the daily interest rate (entered manually), if the money to purchase those items had to be borrowed?

No, there isn't. It's against accounting principals in the US, known as the "mark it to market" rule, which states that inventory should never be revalued up, but must always be revalued down, to reflect fair market value. I doubt you would find a decent accounting package with that feature.

I realized that as soon as I posted it.

The reason for my question, of course, is that it may be difficult to quikly determine the ture margin on an item if the interest on the money to carry that item is not placed on the cost of that item.

Maybe there would be a system that would calculate the interest expense and let you see it, yet would not actually place it on the item, and not show up in the item valuation report.

GridView has all the necessary internal financial functions to calculate the interest. The question is would it be able to find the necessary information (Purchase date, Purchase Cost, Selling date, Selling Price) in a composite table. The "Purchase date" of the item is the issue. The composite table "*SR Trans w Items" would be the place to start.

The GridView formula would required the "Average Interest Rate" for any given period which I suspect could be setup in a "Named Items" file.

This method would not be "exact" but I believe would give a good approximation of the margin.