Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A) Firms may hold inventory because factors such as seasonality in demand mean that customer purchases do not perfectly match the most efficient production cycle.
• B) Inventory helps minimize the risk that the firm will not be able to obtain an input it needs for production.
• C) If a firm holds too much inventory, stock-outs, the situation when a firm runs out of product, may occur, leading to lost sales.
• D) Because excessive inventory uses cash, efficient management of inventory increases firm value.

Understand solvency versus profitability and their relevance in financial analysis.

Calculate and interpret dividend yield and price-earnings (P/E) ratio and their implication for investors.

Understand financial statement components and their relevance to overall company performance.

Analyze company performance and potential for future stock price appreciation based on given financial data.

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Definitions:

LLC Statue

Probably intended to be "LLC Statute," which refers to the laws that govern the formation, operation, and dissolution of Limited Liability Companies.

Dispute Resolution

The process of resolving disagreements or conflicts between parties through negotiations, mediations, arbitrations, or legal proceedings.

Personal Liability

The legal responsibility of an individual to settle debts or legal claims using personal assets.

Limited Liability Company

A firm's structure that integrates the aspect of limited liability similar to a corporation with the pass-through tax benefit akin to that of a partnership or sole proprietorship.