According to the Statement of Cash flOws, an Increase in Inventory

question 352

Multiple Choice

According to the statement of cash flows, an increase in inventory will _____ the cash flow from _____ activities.

• A) Decrease; financing.
• B) Decrease; operating
• C) Increase; financing.
• D) Increase; investing.
• E) Increase; operating.

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Definitions:

Labor Hours

The total number of hours worked by employees, used as a measure of labor input in the production of goods and services.

Inventory Holding Cost

The total cost associated with storing and managing inventory over a certain period, including warehousing, insurance, depreciation, and obsolescence costs.

Marginal Subcontracting Cost

The extra expense faced when outsourcing an additional unit of production or service.

Layoff Cost

Expenses associated with terminating employees, which may include severance pay, benefits continuation, and other related costs.