During a Period of Rising Prices and Inventories, a Company

question 66

Multiple Choice

During a period of rising prices and inventories, a company whose debt/equity ratio is dangerously close to the minimum specified by agreement with a major creditor would prefer which cost flow assumption?

• A)FIFO
• B)LIFO
• C)Average
• D)The company would be indifferent as to which cost flow assumption is adopted.

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Definitions:

Secondary Reinforcement

A process in which a neutral stimulus becomes reinforcing through its association with a primary reinforcer.

Fixed-ratio Scheduling

A type of reinforcement schedule in behaviorism where a response is reinforced only after a specified number of responses.

Negative Reinforcement

A behavior modification technique that involves the removal of an unpleasant stimulus to increase the likelihood of a behavior being repeated.

Primary Reinforcers

Innate reinforcing qualities like food, water, or rest that do not need to be learned because they are naturally satisfying.