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Rue/False: Days B. 60 Days C. 10 Days D. 57 Days
Rue/False: Days B. 60 Days C. 10 Days D. 57 Days
ANS: T PTS: 1
ANS: F PTS: 1
5. Marketing an operations generally prefer high inventory levels while finance would prefer
small inventories.
ANS: T PTS: 1
6. Work in process inventory is completed products ready for distribution or sale to customers.
ANS: F PTS: 1
7. Safety stock inventory is an additional amount of inventory kept over and above the average
amount required to meet demand.
ANS: T PTS: 1 as
ANS: F PTS: 1
ANS: F PTS: 1
10. Costs associated with maintaining storage facilities such as gas and electricity, taxes, and
insurance are associated with fixed ordering costs.
ANS: F PTS: 1
11. Larger orders result in higher total holding cost but lower total ordering cost.
ANS: T PTS: 1
days
B. 60 days
C. 10 days
D. 57 days
15. Which of the following trade credit terms is not valid?
A. 3/10, net 50
B. 8/10 EOM, net 60
C. 2/10, net 30
D. All of the above are valid credit terms
16. Supposing you purchase goods on terms of 1/10, net 30. Taking compounding into
account, what annual rate of interest is implied by the cash discount? (Assume a year
has 365
days.)
A. 9.6%
B. 9.2%
C. 20.1%
D. 44.6%
17. Suppose you purchase goods on terms of 3/10, net 60. Taking compounding into
account,
what annual rate of interest is implied by the cash discount? (Assume a year has 365
days.)
A. 32%
B. 5%
C. 91%
D. 28.2%
18. Suppose you purchase goods on terms of 2/10, net 50. Taking compounding into
account,
what annual rate of interest is implied by the cash discount? (Assume a year has 365
days.)