Which of the Following Is Not Implied When Average Inventory

question 47

Multiple Choice

Which of the following is not implied when average inventory is Q/2, where Q is the order quantity?

• A) An entire order quantity arrives at one time.
• B) The previous order quantity is entirely depleted when the next order arrives.
• C) An order quantity is depleted at a uniform rate over time.
• D) Backorders are permitted.

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Definitions:

Depreciation Deduction

A tax deduction that allows a taxpayer to recover the cost of property or assets that have a useful life beyond the tax year, through annual allowances.

Income Tax Expense

The accounting term for the income taxes payable within a given period, reflecting the cost of the taxes a company must pay based on its earnings.

Present Value

Present value is a financial concept that calculates the current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Annuity

A financial product that pays out a fixed stream of payments to an individual, often used as an investment for retirement.