For a Company That Uses the Perpetual Inventory System,a Physical

question 9

True/False

For a company that uses the perpetual inventory system,a physical count of the inventory can reveal the amount of inventory shrinkage the company has experienced.

---

Definitions:

Real Option

A real option is a financial concept that represents the choice to undertake certain business initiatives, such as expanding, deferring, or abandoning a project, based on future opportunities.

Expected NPV

The anticipated Net Present Value of an investment, calculated using expected cash flows and discounting them to their present value.

Project's Risk

The potential for losses or less-than-expected returns from a specific investment or business project.

Risk

The potential for losing something of value, often measured by the variability of returns associated with an investment.