A Project Will Reduce the Amount of Inventory That a Firm

question 89

Multiple Choice

A project will reduce the amount of inventory that a firm must carry. What effect will this have on the project's cash flows if all inventory is purchased for cash?

• A) There will only be a cash outflow at time zero.
• B) There will be no effect on the cash flows since the inventory has already been paid for.
• C) There will be a cash outflow at time zero and an equal cash inflow when the project ends.
• D)There is an assumed cash outflow equal to the inventory reduction at the end of the project.

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Definitions:

Amplitude

The height of a wave from its baseline to its peak, indicating the strength or intensity of the wave, such as in sound or light.

Intensity

The magnitude or strength of a phenomenon, often used in context with physical phenomena such as light, sound, and emotions.

Amplitude

The magnitude or intensity of a wave's fluctuation, measured from its baseline to its peak, in physical and electrical phenomena.

Relative Motion

The concept that the motion of an object is always determined relative to some other moving or stationary object.