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An Increase in the Inventory Turnover Ratio Is Normally Considered

Question 2

Multiple Choice

An increase in the inventory turnover ratio is normally considered to be favourable but could be unfavourable if it means:


A) inventory is less likely to become obsolete.
B) liquidity is greater.
C) the firm not carrying enough inventory to meet its customer's needs.
D) storage costs of inventory are lower.

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