Which of the Following Statements Is Not Correct Regarding the Importance

question 80

Multiple Choice

Which of the following statements is not correct regarding the importance of inventory turnover to a company's profitability?

• A)Companies will prefer to have a low inventory turnover rather than a high inventory turnover.
• B)It is sometimes more desirable to sell a large amount of merchandise with a small amount of gross margin than a small amount of merchandise with a large amount of gross margin.
• C)A company's profitability is affected by how rapidly inventory sells.
• D)A company's profitability is affected by the spread between cost and selling price.

---

Definitions:

Disagreement Value

The worst outcome that a party is willing to accept before walking away from negotiations or a transaction.

Car Dealer

A business entity that sells new or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary.

Sale Price

The final price at which a product or service is sold after any deductions or promotions.

Bargaining Position

The relative power or advantage one party holds during negotiations, affecting their capacity to influence the terms.