Which One of the Following Statements Is Correct

question 40

Multiple Choice

Which one of the following statements is correct?

• A)A farmer generally uses a type of financing that employs trust receipts to provide financing during the growing season.
• B)Floor plan arrangements are most applicable to large,easily identifiable types of inventory.
• C)A drug store is more apt to have a financing arrangement involving trust receipts than one involving a blanket lien.
• D)A third-party inventory manager is generally involved with the lender and the borrower in a floor plan arrangement.
• E)A direct loan from a bank is generally less expensive than a loan involving commercial paper.

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Definitions:

Capacity

The maximum level of output that a company can sustain to produce goods or services under given conditions over a certain period.

Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Transfer Price

The price at which goods or services are sold between divisions within the same company or between companies under common control.

Variable

A quantity or factor in an experiment or equation that can change or be changed.