1. Saftey stock tends to reduce carrying costs.
A) True
B) False
2. Ordering costs are at their lowest at point M in Figure 7-8 on page 212.
A) True
B) False
3. Trade credit is an important source of working capital.
A) True
B) False
4. Effective rates of interest reflect the true cost of borrowed funds.
A) True
B) False
5. Given a 20% compensating balance requirement, a corporation would need to borrow $500,000 to pay a $400,000 capital expense.
A) True
B) False