Costs that rise with increases in the level of investment in current assets are called:
A) capital costs.
B) carrying costs.
C) commitment costs.
D) liquid capital costs.
E) short-term capital costs.

Question

Quizplus · Accepted Answer

Carrying costs are the expenses associated with holding or "carrying" inventory and other forms of current assets. These costs typically increase as the level of investment in current assets rises, covering aspects like storage, insurance, and opportunity costs of the capital tied up in inventory.

Costs That Rise with Increases in the Level of Investment