Which of the Following Statements Is FALSE

question 40

Multiple Choice

Which of the following statements is FALSE?

• A)A serious concern for large corporations is that managers may make large,unprofitable investments.
• B)While overspending on personal perks may be a problem for large firms,these costs are likely to be small relative to the overall value of the firm.
• C)Some financial economists explain a manager's willingness to engage in negative-NPV investments as empire building.
• D)While ownership is often diluted for small,young firms,ownership typically becomes concentrated over time as a firm grows.

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Definitions:

ABC Analysis

A method for classifying inventory or items into three categories (A, B, and C) based on their importance, usually determined by value or usage rate.

Inventory Savings

Reductions in costs achieved through efficient management of stock, including ordering, storing, and using goods or materials.

Economic Order Quantity

A calculation that determines the optimal order quantity that minimizes total inventory costs, including holding, ordering, and shortage costs.

Safety Stock

An extra quantity of inventory kept on hand to prevent stockouts caused by unpredictable demand or supply delays.