Hedging Involves Buying Larger Amounts of Inventory in Anticipation of Future

question 91

True/False

Hedging involves buying larger amounts of inventory in anticipation of future price increases.

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Definitions:

Obsolete Inventory

Items in stock that are out of date or no longer in demand, often leading to reduced value or write-offs.

Accounts Payable Period

The average number of days it takes for a business to pay its invoices from suppliers, reflecting its payment policy efficiency.

Cash Cycle

The time it takes for a company to convert its investments in inventory back into cash.

Cash Cycle

The period between the outlay of cash for raw materials and receiving payment from customers for goods or services, reflecting the efficiency of a company's cash management.