Which of the Following Is NOT an Assumption of the Economic

question 54

Multiple Choice

Which of the following is NOT an assumption of the economic order quantity model shown below? Q* =

• A)Demand is known,constant,and independent.
• B)Lead time is known and constant.
• C)Quantity discounts are not possible.
• D)Production and use can occur simultaneously.
• E)The only variable costs are setup cost and holding (or carrying)cost.

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Definitions:

Differential Tax Rates

Different rates of taxation applied to different levels of income, types of taxpayers, or types of activities, to achieve various economic or social objectives.

Effective Rate

The interest rate on a loan or financial product, re-calculated to include all fees and compounded interest, showing the true cost of the loan over its term.

Deferred Taxes

Taxes that are due on income or transactions that have been recorded in the financial statements but have not yet been settled in cash.

Tax Contingency Reserve

A tax contingency reserve is an accounting provision made to cover potential tax liabilities that may arise due to uncertainties in the interpretation of tax laws or disputes with tax authorities.