Suppose a Firm Was Planning to Greatly Reduce Its Raw

question 4

Multiple Choice

Suppose a firm was planning to greatly reduce its raw materials inventory next year by introducing just-in-time inventory control procedures. Assuming no other changes to the firm's operations, what would this do to AFN?

• A) It would not change the AFN.
• B) The AFN would decrease.
• C) The AFN would increase.
• D) It cannot be determined without knowing the impact on the profit margin.

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