Southeast Wood Products, Inc reports sales of 20,000,000 and ...

[darbym82]

Southeast Wood Products, Inc reports sales of 20,000,000 and inventory of 4,000,000. Southeast's
  inventory possesses significant economies of scale.
 
  Therefore, if the firm's sales increase by 10,
  Southeast's inventory will ________ and if Southeast's sales decrease by 10, Southeast's inventory
  will ________.
  A) decrease by more than 10; decrease by more than 10
  B) increase by more than 10; decrease by less than 10
  C) increase by less than 10; decrease by less than 10
  D) increase by more than 10; increase by more than 10

Question 2

When solving for future value, we use the term compounding of cash flows rather than the term discounting of cash flows.
 
  Indicate whether the statement is true or false.

[abctaiwan]

Answer to Question 1

C

Answer to Question 2

Answer: TRUE