If a Computer Retailer Has 20 Computers at the Beginning

question 120

Multiple Choice

If a computer retailer has 20 computers at the beginning of the month, receives an additional 35 computers during the month, and sells no computers during the month, the retailer's inventory investment for that month would be

• A)minus 35 computers.
• B)plus 20 computers.
• C)minus 20 computers.
• D)plus 35 computers.
• E)plus 55 computers.

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Definitions:

Fixed Costs

Expenses that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.

Cash Flow

The full measure of money movement into and out of an organization, primarily altering its liquidity status.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, reflecting the risk and time value of money.

Initial Cost

The total expense incurred to acquire an asset or start a project, including purchase price and all associated fees.