Consider the Following Information Pertaining to OldWest's Inventory: at What

question 69

Multiple Choice

Consider the following information pertaining to OldWest's inventory: At what amount should OldWest report its inventory?
$$\begin{array} { | l | c | r | r | } \hline \text { Procuct } & \text { Quantly } & \text { Cost } & \begin{array} { r } \text { Net Realizable } \\\text { Value }\end{array} \\\hline \text { Revolvers } & 16 & \$ 120 & \$ 150 \\\hline \text { Spurs } & 23 & 27 & 22 \\\hline \text { Hats } & 12 & 56 & 40 \\\hline\end{array}$$

• A)$3,213.
• B)$3,386.
• C)$2,996.
• D)$2,906.

---

Definitions:

Exercise Price

The fixed price at which the holder of an options contract can buy (in the case of a call) or sell (in the case of a put) the underlying security or commodity.

ESOs

Employee Stock Options; rights granted to employees to purchase a company's stock at a predetermined price for a specific period.

Convertible Bond

A bond that can be exchanged for a fixed number of shares of stock for a specified amount of time.

Upside Potential

The estimated amount by which a security’s market price or value could rise, representing the opportunity for profit.