Which One of the Following Statements Is Best

question 90

Multiple Choice

Which one of the following statements is best?

• A) AP system lends itself more to quantity discounts than does a Q system.
• B) In a periodic review system, the value of Q is kept the same from one cycle to another.
• C) AP system requires more administrative control and computer support than does a Q system.
• D) AP system requires more safety stock than a Q system.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or investment.

Foregone CCA

The term "Foregone CCA" does not exist in widely recognized financial lexicons and might be incorrectly stated or highly specific to a niche sector.

Tax Shield

The reduction in income taxes that results from taking allowable deductions from taxable income, such as interest on debt.

Fully Taxable Recapture

The process whereby the IRS fully taxes the depreciation or deductions previously taken on an asset, typically when the asset is sold for a gain.