The Valuation Approach to Making Short-Term Financial Decisions Uses Discounting

question 11

Multiple Choice

The valuation approach to making short-term financial decisions uses discounting to assess shareholder wealth effects.Using a cash flow timeline to assess various inventory purchase quantities is premised on an objective which should lead to enhanced shareholder wealth,which is

• A)maximizing return on inventory investment
• B)minimizing the sum of inventory holding and ordering costs
• C)minimizing the present value cost of inventory-related cash flows
• D)maximizing the gross margin return on inventory investment
• E)none of the above