Which of the Following Would Not Generally Be a Motive

question 101

Multiple Choice

Which of the following would not generally be a motive for a firm to hold inventories?

• A) to decouple or separate parts of the production process
• B) to provide a stock of goods that will provide a selection for customers
• C) to take advantage of quantity discounts
• D) to minimize holding costs
• E) to eliminate safety stock

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Definitions:

Sales-Type Lease

A sales-type lease is a type of lease where the lessor recognizes profits from the selling price of the leased asset and interest income from the financing, distinguished from an operating lease.

Guaranteed Residual Value

The predetermined value at which a lessee can buy a leased asset at the end of the lease term, as guaranteed by the lessee or a third party.

Cost of Goods Sold

The specific expenses related to manufacturing the products that a business sells, encompassing labor and materials.

Present Value

The immediate worth of a forthcoming amount of money or stream of cash inflows, evaluated at a particular rate of return.