Which of the Following Statements About Inventory Turnover Is Most

question 90

Multiple Choice

Which of the following statements about inventory turnover is most appropriate?

• A)A high ratio indicates the company is having trouble selling its inventory.
• B)Companies generally strive to have the lowest possible inventory turnover ratio.
• C)A low ratio generally means the company is not keeping enough inventory on hand.
• D)The most profitable turnover ratio may not necessarily be the highest.

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Definitions:

Market Rate

The Market Rate is the current price or rate at which a good or service can be bought or sold in a competitive marketplace.

Issue Price

It refers to the price at which a new security, such as a bond or stock, is offered to the public for sale.

Present Value

The present value of a future amount of money or succession of cash flows, assuming a certain rate of return.

Bond Interest Expense

The cost incurred from borrowing funds through the issuance of bonds, represented as interest payments to bondholders.