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.
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An inventory record sheet shows a balance on hand of 972. During the month units sold were 111, ...
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