A Floating Inventory Lien Is a Lender's Claim on the Borrower's

question 84

True/False

A floating inventory lien is a lender's claim on the borrower's general inventory as collateral for a secured loan.

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Definitions:

Carrying Cost

The total cost of holding inventory, which includes storage, insurance, depreciation, spoilage, and opportunity cost.

Fixed Cost

Costs that do not change with the volume of production or level of activity within a certain range.

Economic Order Quantity

A formula used to determine the optimal order size that minimizes the total holding costs and ordering costs in inventory management.

Variable Cost

Costs that vary directly with the level of production or volume of output.