Which One of the Following Mathematical Definitions Is Correct

question 150

Multiple Choice

Which one of the following mathematical definitions is correct?

• A) The cost of switching credit policies is defined as the quantity multiplied by (P-v).
• B) The net present value of extending credit is equal to -v + (P- v)/R.
• C) The total cost of holding inventory is equal to (Q)(CC) + (F)(T/Q).
• D) The economic order quantity is equal to the square root of (T)(F)/CC.
• E) Accounts receivable is defined as average daily sales multiplied by the average collection period.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Alternative Choices

Different options or courses of action that can be taken in a decision-making process.

Sunk Cost

A cost that has already been incurred and cannot be recovered, regardless of future events.

Differential Cost

The difference in cost between two alternative decisions or changes in the level of output or activity.