Everything Else Held Constant, Will an Increase in the Amount

question 118

Multiple Choice

Everything else held constant, will an increase in the amount of inventory on hand increase or decrease the firm's profitability?

• A) Decrease the profitability.
• B) Increase the profitability.
• C) It could either increase or decrease the profitability depending on net profit margins.
• D) It could either increase or decrease the profitability depending on the debt ratio.

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Definitions:

Protein Kinase C

An enzyme that modifies other proteins through the chemical addition of phosphate groups, playing a key role in several signal transduction pathways.

DAG

Diacylglycerol, a type of molecule that functions as a secondary messenger in the transmission of cellular signals.

Calcium Ions

Positively charged calcium particles (Ca2+) that play key roles in various physiological and biochemical processes in living organisms, including muscle contraction and neurotransmitter release.

Phospholipase C

An enzyme that catalyzes the hydrolysis of phospholipids into diacylglycerol and inositol triphosphate, playing an important role in cell signaling.