Figure 21-1 A Company Keeps 20 Days of Materials Inventory on Hand

question 33

Multiple Choice

Figure 21-1
A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average £4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor's carrying costs average £2,000 per day.
-Refer to Figure 21-1. The value-added costs are

• A)£80,000.
• B)£40,000.
• C)£20,000.
• D)£-0-.

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Definitions:

Target Firm

A company that is the object of a takeover attempt, whether friendly or hostile, by another company or corporate entity.

Incremental Value

The additional or extra value generated by undertaking a certain action or investment.

Market Price

The immediate price point for acquiring or disposing of assets or services in a commercial space.