Choosing the optimal level of investment in each current asset type involves a trade-off between carry costs and:
A)opportunity costs.
B)financing costs.
C)safety costs.
D)shortage costs.

Question

Quizplus · Accepted Answer

The optimal level of investment in current assets involves balancing carry costs with shortage costs, which are the costs associated with running out of inventory or not having enough current assets to meet demand.

Choosing the Optimal Level of Investment in Each Current Asset