Which Company Is Most Likely to Have a Higher Inventory

question 26

Multiple Choice

Which company is most likely to have a higher inventory turnover than its competitors within the same industry?

• A)A company with lower-priced goods and lower gross profit.
• B)A company with higher-priced goods and lower gross profit.
• C)A company with higher-priced goods and higher gross profit.
• D)A company that reports lower cost of goods sold and higher inventory values.

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Definitions:

Duty of Care

A legal obligation imposed on individuals or entities requiring adherence to a standard of reasonable care to prevent harm to others.

Illegal Dividends

Dividends distributed by a company despite it not having sufficient profits or legally available capital, violating corporate law or its own articles of incorporation.

Shareholder's Derivative Suit

A legal action brought by shareholders on behalf of a corporation to enforce or defend its rights when the corporation's management fails to do so.

Black Market

An illegal trade of goods or services that violates governmental regulations, often to avoid taxes or because the goods are prohibited.