A: EOQ (Economic Order Quantity) minimizes the total cost of inventory. R: EOQ balances ordering costs and carrying costs. Choose the correct option. MCQ with Answer and Explanation
A: EOQ (Economic Order Quantity) minimizes the total cost of inventory. R: EOQ balances ordering costs and carrying costs. Choose the correct option.
A. A is true but R is false
B. A is false but R is true
C. Both A and R are true and R is the correct explanation of A
D. Both A and R are true but R is NOT the correct explanation of A
Answer: Option C
Solution (By JKSSB Mock Tests)
EOQ is the order quantity that minimizes total inventory costs. It achieves this by finding the point where total ordering costs equal total carrying costs. R correctly explains the mechanism of EOQ.
Explanation:
The primary objective of financial management is to maximize shareholder wealth. However, it involves not just raising funds, but also their effective utilization, dividend decisions, and working capital management. A is true, R is false.
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