What Method of Inventory Valuation Is It When the Cost

question 13

Multiple Choice

What method of inventory valuation is it when the cost of inventory is defined as the amount that an entity would receive from selling the inventory, less any additional selling costs?

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

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Definitions:

DFL

Degree of Financial Leverage; a measure that shows how much a company's earnings per share (EPS) are affected by changes in its operating income, indicating the volatility of earnings.

Dividends Per Share

The amount of dividends paid to shareholders, divided by the number of outstanding shares of a company's stock.

Stock Price

The present rate at which a company's stock is bought and sold on the stock exchange.

Present Value

The present worth of a future amount of money or sequence of cash payments, calculated using a particular return rate.