Which of the Following Is Considered an Ordering Cost

question 39

Multiple Choice

Which of the following is considered an ordering cost?

• A)insurance on the inventory
• B)the opportunity cost of funds invested in inventory
• C)storage costs
• D)unloading costs

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Definitions:

Risk-Free Rate

The theoretical rate of return on an investment with no risk of financial loss, often represented by government bonds.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher than market volatility, while a beta less than 1 indicates lower.

Required Rate of Return

A rephrasing of Required Return; the minimum annual percentage earned by an investment that will entice an individual or company to invest money.

Expected Growth Rate

The projected annual rate at which an investment or business is expected to grow.