Which of the Following Equations Determines the Total Annual Carrying

question 56

Multiple Choice

Which of the following equations determines the total annual carrying costs when no safety stock is kept?

• A)Cost of placing an order × Order quantity
• B)Cost of placing an order × Number of orders per year
• C)Cost of placing an order × One-half of the order quantity
• D)Unit carrying costs per year × One-half of the order quantity

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Definitions:

Return On Equity

A measure of a corporation's profitability, indicating how much profit a company generates with the money shareholders have invested.

Debt-Equity Ratio

A measure that indicates the balance between equity contributed by shareholders and debt employed to finance company assets.

Return On Equity

A gauge of corporate profitability that indicates the profit made from the investments of its shareholders.

Return On Assets

A financial ratio that indicates the percentage of profit a company earns in relation to its overall resources. It demonstrates how effectively a company is using its assets to generate earnings.