Which of the Following Statements About Holding Gain (Cost Savings)in

question 24

Multiple Choice

Which of the following statements about holding gain (cost savings) in the CCA model is false?

• A) Unrealised savings include gains (cost saving) from holding inventory that has increased in price, which have yet to be realised.
• B) Realised savings relate to cost savings in inventory actually incurred, and gains (cost savings) relate to depreciation actually incurred.
• C) Unrealised savings include gains (cost savings) from holding depreciable assets (with higher replacement costs) not yet realised through the process of depreciation.
• D) All of the given options are correct.

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Definitions:

Profit

The financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Risk-free Rate

The theoretical return on investment with no risk of financial loss, often represented by the yield on government securities.

Exchange Rate

The price of one country's currency in terms of another, essential for currency exchange and international trade.