An Unplanned Increase in Inventories Results from

question 61

Multiple Choice

An unplanned increase in inventories results from

• A)an increase in planned investment.
• B)a decrease in planned investment.
• C)actual investment that is greater than planned investment.
• D)actual investment that is less than planned investment.
• E)consumers spending more than firms expected.

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Definitions:

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity.

Variable Cost

Variable Cost refers to expenses that change directly and proportionally with the level of production or sales activity, such as raw materials and direct labor costs.

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including lease payments, wages, and premiums.

Operating Income

Operating Income, also known as operating profit, reflects the amount of profit realized from a business's operations, after deducting operating expenses like wages and cost of goods sold, but before interest and taxes.