Items Should Be Included as Part of the Company's Inventory

question 39

Multiple Choice

Items should be included as part of the company's inventory if they are

• A)Purchased from a creditor,although not paid for by year end.
• B)Held in anticipation of an increase in market value.
• C)Determined to be part of cost of goods sold.
• D)Sold during the period.

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Definitions:

Interest Tax Shield

The savings in income tax that a company achieves through deducting its interest expense from its taxable income.

WACC

Weighted Average Cost of Capital, a calculation of a firm's cost of capital where each category of capital is proportionately weighted.

Capital Structure

The particular combination of debt and equity that a company uses to finance its overall operations and growth.

Financial Risks

The possibility of losing money on an investment or business operation due to market fluctuations, default, or other financial uncertainties.