Which Circumstance Would Cause Average Inventory Holdings to Decrease,other Things

question 30

Multiple Choice

Which circumstance would cause average inventory holdings to decrease,other things held constant?

• A)Fixed order costs double.
• B)The purchase price of inventory items decreases by 50%.
• C)The carrying price of an item decreases as a percentage of purchase price.
• D)The sales forecast is revised downward by 10%.

---

Definitions:

Financing Activities

Transactions and events that involve raising funds for the company and repaying funds to investors, such as issuing stock or borrowing.

Cash Dividend

A payment made by a company out of its profits to shareholders in the form of cash.

Financing Activities

Activities that result in changes in the size and composition of the equity and/or borrowings of a company.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.