Companies Generate Assets in Three Different Ways

question 80

Multiple Choice

Companies generate assets in three different ways. They are

• A)equity contributed by owners, borrowings, and receivables from affiliates.
• B)equity issuances, borrowings, and interest rates.
• C)borrowings, profitable operations, and equity issuances.
• D)equity issuances, debt issuances, and financial instruments.

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Definitions:

Order Policy

Guidelines established by a company to determine minimum inventory levels, reorder points, and order quantities to manage inventory effectively.

Basic EOQ Model

The Economic Order Quantity model, a formula used to determine the optimal quantity of inventory to order, minimizing total inventory costs.

Ordering Cost

Expenses incurred in placing and processing orders for products or materials, including administrative costs and the cost of receiving and inspecting the items.

Carrying Cost

The total cost of holding inventory, including storage costs, insurance, and depreciation, among others.