Inventory Item Z8 Has a Cost Price of $30 and a Net

question 26

Multiple Choice

Inventory item Z8 has a cost price of $30 and a net realisable value $25,while item D3 has a cost price of $20,a net realisable value $25 and a replacement cost of $21.Under the lower of cost and net realisable value rule of inventory valuation,applied on an item-by-item basis,the value of inventory is:

• A) $50
• B) $51
• C) $45
• D) none of the above

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Definitions:

Loanable Funds

The total funds available from savers for borrowing in the financial markets, used for investments, purchasing goods, or other purposes.

Private Investment

Spending by businesses or individuals on capital goods, such as factories, machinery, and homes, which is used to produce goods or services.

Demand For Loanable Funds

The total quantity of loans that borrowers are willing to take out at various interest rates, holding all else equal.

Equilibrium Interest Rate

The interest rate at which the quantity of loanable funds demanded equals the quantity supplied, leading to a balance in the money market.