For inventory carrying costs, which of the following statements is true of the relevant opportunity cost of capital of inventory?
A) It is the return received by investing capital in inventory rather than elsewhere.
B) It is calculated as the per-unit costs of carrying inventory divided by the required rate of return .
C) It is the return foregone by investing capital elsewhere rather than in inventory.
D) It is calculated as the required rate of return multiplied by the per-unit costs of acquiring inventory including the purchase price, incoming freight, and incoming inspection.

Question

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The Answer of For inventory carrying costs, which of the following statements is true of the relevant opportunity cost of capital of inventory?
A) It is the return received by investing capital in inventory rather than elsewhere.
B) It is calculated as the per-unit costs of carrying inventory divided by the required rate of return .
C) It is the return foregone by investing capital elsewhere rather than in inventory.
D) It is calculated as the required rate of return multiplied by the per-unit costs of acquiring inventory including the purchase price, incoming freight, and incoming inspection.

For Inventory Carrying Costs, Which of the Following Statements Is