Inventory Reduction Is a ____ Principle

question 83

Multiple Choice

Inventory reduction is a ____ principle.

• A) just-in-time
• B) traditional processing
• C) economic
• D) wait time

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Definitions:

Payback Period

The duration needed to recover the cost of an investment, typically measured in years or months.

Incremental Cost Approach

The incremental cost approach involves analyzing the additional costs incurred when increasing the production or scope of a project to determine if the benefits outweigh the costs.

Discount Rate

The rate utilized to calculate the present value of upcoming cash flows in a discounted cash flow analysis process.

Salvage Value

The estimated residual value of an asset after its useful life has ended and it can no longer be used for productive purposes.