--%>

Inventory is sometimes thought of as a needed evil

What are the reasons that Inventory is sometimes thought of as a needed evil.

E

Expert

Verified

Inventory ties up funds and these funds are not earning an explicit return. Some amount of inventory is constantly needed as companies try to hold the lowest acceptable amount.

   Related Questions in Financial Management

  • Q : Rapid development of the interest rate

    If the cost benefit of interest rate swaps would probably be arbitraged away in competitive markets, what other explanations present to explain the rapid development of the interest rate swap market?All kinds of debt instruments are not always o

  • Q : HW Otobai Motor Company is currently

    Otobai Motor Company is currently paying a dividend of $1.40 per year. The dividends are expected to grow at a rate of 18% for the next three years and then a constant rate of 5% thereafter forever. What is the vlaue of its current stock price? Assuming that the discount rate is 10%.{Hint: pages 84-

  • Q : Who concluded that stock prices were

    Who concluded that stock prices were unpredictable and coined the phrase ‘market efficiency’?

  • Q : Example of Risk-Neutral Valuation Work

    A stock whose value is now $44.75 is growing on average by 15 percent per annum. Its volatility is 22 percent. The interest rate is 4 percent. You need to value a call option along with a strike of $45, expiring in two months’ time. So, what can you do?

  • Q : What is Vega Hedging What is Vega

    What is Vega Hedging?

  • Q : Internal rate of return Which is the

    Which is the deciding factor for rejecting or accepting proposed projects while using internal rate of return?

  • Q : Categorize the issues of Knight

    Categorize the issues of Knight.

  • Q : Described advantages and disadvantages

    Described the advantages & disadvantages of the gold standard. The advantages of the gold standard comprise: (I) as the supply of gold is limited, countries cannot comprise high inflation; (2) any BOP disequili

  • Q : How is marking to market straightforward

    How is marking to market straightforward?

  • Q : Appropriate demand of return for a

    How much more demand of return is appropriate for a share of common stock by risk-averse investors, when compared to a Treasury bill?