Which of the Following Statements Is False

question 11

Multiple Choice

Which of the following statements is false?

• A) Optimal inventory levels involve a trade-off between carrying costs and order costs.
• B) Carrying costs include the cost of storing goods as well as the cost of capital tied up in inventory.
• C) Optimal inventory levels are lower when storage or interest costs are high and are higher when restocking costs are high.
• D) Inventory levels do not rise in direct proportion to sales. As sales increase, the optimal inventory level rises, but more than proportionately.

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Definitions:

Revised Article 3

The updated section of the Uniform Commercial Code that delineates rules and procedures for negotiable instruments.

Particular Fund Doctrine

The principle that a creditor can only lay claim to specific funds or assets of a debtor rather than the debtor's general assets.

90-Day Note

A financial instrument promising payment of a specific sum to the holder 90 days after issuance.

Variable Rate

An interest rate that can fluctuate over the duration of a loan or financial product based on changes in benchmark interest rates or market conditions.