At certain times of the year,many retail companies experience a rapid rise in inventory as they prepare for a period of high sales.All other things equal,this would cause:
A)the quality of income,and the capital acquisitions ratios to fall.
B)the quality of income ratios to fall while the capital acquisitions ratio remains the same.
C)the quality of income ratio to fall while the capital acquisitions ratios remain the same.
D)the quality of income,and the capital acquisitions ratios to rise.

Question

Quizplus · Accepted Answer

A rapid rise in inventory would lead to a decrease in the quality of income, as the company would have to spend more money on inventory and would have less money available to pay for other expenses. It would also lead to a decrease in the capital acquisitions ratio, as the company would have less money available to invest in new equipment and other assets.

At Certain Times of the Year,many Retail Companies Experience a Rapid