A Business Finds That Employees Are Involved in Many Road

question 4

Multiple Choice

A business finds that employees are involved in many road accidents that result in damages to its fleet of motor vehicles,despite having driving training and instruction.Rather than fully insuring its equipment,the business elects to insure its vehicles subject to a deductible of $1,500 per vehicle.Which approach to risk management does this plan reflect?

• A) risk avoidance
• B) risk reduction
• C) risk transference
• D) risk retention

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in inventory management.

Days' Sales

A metric that calculates the average time it takes for a company to convert its inventory into sales.

Average Daily Cost

This measures the average amount spent per day over a specified period, often used in budgeting and financial planning.

Periodic Inventory System

A method of inventory valuation where updates to inventory records are made at specified periods, rather than continuously.