(Table 2: Economic Data for Four Firms, 2017) Table 2

question 65

Multiple Choice

(Table 2: Economic Data for Four Firms, 2017) Table 2 provides 2017 economic data for four firms. Use the data to determine which firm had unplanned inventory investment of $200,000.
$\begin{array}{c}\hline \text { Table 2. Economic Data for Four Firms, } 2017\\\begin{array}{|l|l|l|l|l|l|}\hline & \begin{array}{c}\text { Revenue from } \\2017 \text { Sales }\end{array} & \begin{array}{c}\text { Value of } 2017 \\\text { Production }\end{array} & \begin{array}{c}\text { Purchases of } \\\text { New Equipment }\end{array} & \begin{array}{l}\text { Construction of } \\\text { New Facilities }\end{array} & \begin{array}{c}\text { Value of Desired } \\\text { Change in } \\\text { Inventory }\end{array} \\\hline \text { Firm A } & \$ 10,400,000 & \$ 10,600,000 & \$ 300,000 & \$ 0 & \$ 0 \\\hline \text { Firm B } & \$ 10,400,000 & \$ 10,000,000 & \$ 100,000 & \$ 75,000 & \$ 25,000 \\\hline \text { Firm C } & \$ 10,400,000 & \$ 10,200,000 & \$ 0 & \$ 0 & \$ 0 \\\hline \text { Firm D } & \$ 10,400,000 & \$ 10,800,000 & \$ 50,000 & \$ 100,000 & \$ 50,000\\\hline\end{array}\end{array}$

• A) Firm A
• B) Firm B
• C) Firm C
• D) Firm D

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Definitions:

Unrecognized Loss

A loss that has occurred but has not yet been reported in the financial statements because it has not been realized through a transaction.

Amortization

A process of spreading out a loan's cost over its lifespan, reducing the value of an intangible asset or debt over a specified period.

Projected Benefit Obligation

An estimate of the total amount of benefits to be paid out to employees in a defined benefit pension plan, based on current and future salary levels.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, reflecting the risk and time value of money.