Inventory Investment Refers to

question 10

Multiple Choice

Inventory investment refers to

• A)the difference between production and sales in a given year.
• B)fixed investment.
• C)nonresidential investment.
• D)the purchase by firms of new machines.

---

Definitions:

Average Inventory

A metric that estimates the amount of inventory a business has on hand over a certain period, calculated by taking the sum of the beginning and ending inventory levels divided by two.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made on a periodic basis, as opposed to continuously.

Cost Of Goods Sold

The direct financial outlays for labor and materials that are necessary for producing goods a company sells.