Which of the Following Statements Is False

question 38

Multiple Choice

Which of the following statements is false?

• A) Under the Modigliani-Miller assumptions of perfect capital markets, the amount of inventory is irrelevant.
• B) Unlike trade credit, inventory represents one of the required factors of production.
• C) It is the firm's financial manager who must arrange for the financing necessary to support the firm's inventory policy and who is responsible for ensuring the firm's overall profitability.
• D) Inventory management receives extensive coverage in courses on operations management.

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Definitions:

Fair Value Option

An accounting option that allows companies to record certain financial assets and liabilities at their fair value, reflecting current market conditions.

Equity Method Investment

An accounting approach used for recording investments in subsidiary companies where the investor has significant influence but not full control.

Acquisition Method

A set of accounting procedures used for incorporating the financial records of a target company into those of an acquirer.

Business Combination

The process of merging two or more entities into one, commonly through acquisitions, consolidations, or mergers.