A Key Question That Relates to the Asset Cycle Is

question 10

Multiple Choice

A key question that relates to the asset cycle is:

• A) Will an increase in cost impact competitive advantage?
• B) What are the returns generated by investment in the business?
• C) What is the borrowing capacity of the organisation?
• D) What is the cost of holding inventory?

---

Definitions:

Average Inventory

The mean value of inventory over a certain time period, used for inventory management and planning.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and obsolescence.

Net Present Value

A calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate.

Accounts Receivable Approach

A method for managing and analyzing a company's incoming payments or receivables from customers to whom it extends credit.