Annual Ordering Cost Is Inversely Related to Order Size,as the Size

question 13

True/False

Annual ordering cost is inversely related to order size,as the size of orders decreases the annual cost of ordering increases.

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Definitions:

NPV

Net Present Value represents the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

Cost of Capital

The profit rate that an organization must reach in its investment operations to keep its market status and draw financial resources.

Cash Inflows

The total amount of money being transferred into a business, typically measured over a specific period of time.