What Method of Inventory Valuation Is It When the Cost

question 10

Multiple Choice

What method of inventory valuation is it when the cost of inventory is defined as the amount that an entity would have to pay to replace its existing inventory?

• A)Replacement cost
• B)Net realizable value
• C)Average cost
• D)FIFO

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Definitions:

Probability Density Function

A function that represents the probability of a random variable assuming a specific value.

Uniform Distribution

A type of probability distribution where all outcomes are equally likely; any one of several outcomes has an equal chance of occurring.

Random Variable

A variable that takes on a set of possible values, each with an associated probability, representing outcomes of a statistical experiment.

Probability

A measure quantifying the likelihood that an event will occur, expressed on a scale from 0 to 1.