Which of the Following Are Inversely Related to Increases in a Firm's

question 49

Multiple Choice

Which of the following are inversely related to increases in a firm's current assets?
I.Reorder costs
II.Shortage costs
III.Restocking costs
IV.Carrying costs

• A)I and III only
• B)II and IV only
• C)I, II, and III only
• D)II, III, and IV only
• E)I, III, and IV only

---

Definitions:

External Financing Needed

The amount of funding a company needs to raise from outside sources to finance its business operations or growth plans.

Long-Term Debt

Borrowings that are due to be repaid more than one year from the date of the financial statement.

Dividend Payout

A portion of a company's earnings that is distributed to shareholders.

External Financing Needed

The additional funding a firm requires to finance its spending plans, such as investments in fixed assets or increases in working capital, beyond what can be funded by internal sources.