What Is the Best Method for Controlling Inventory Holding Costs

question 42

Multiple Choice

What is the best method for controlling inventory holding costs?

• A) increasing product variety
• B) extending the life of goods
• C) using multiple vendors
• D) changing warehouse locations
• E) monitoring factory processes

---

Definitions:

Lessor's Implicit Rate

The interest rate used in lease agreements, assumed by the lessor, that when applied to the lease payments, equals the fair value of the leased asset.

Ordinary Annuity

A series of equal payments made at the end of consecutive periods over a fixed length of time, such as monthly rent or annual scholarship allowances.

Present Value Factors

Multipliers used to calculate the present value of a sum to be received in the future by accounting for time value of money.

Minimum Rental Payments

The lowest amount of payment due under a lease agreement, which includes both the principal and interest components for a lease.