Why Do Small Business Managers Tend to Overbuy Inventory

question 82

Multiple Choice

Why do small business managers tend to overbuy inventory?

• A)They forecast greater demand than is realistic
• B)Vendor's insist that prices may be going down.
• C)They don't want to disappoint vendors and suppliers.
• D)Maximizing inventory is a good way to decrease taxes.

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Definitions:

Debt/Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets, often used to gauge financial health and risk.

Required Rate of Return

The lowest yearly percentage gain from an investment required to attract individuals or businesses to invest in a specific security or venture.