Carrying costs are associated with having current assets and fall into which general category?
A) The opportunity costs associated with having capital tied up in current assets instead of more productive fixed assets.
B) Explicit costs necessary to maintain the value of current assets.
C) both a and b
D) neither a or b

Question

Quizplus · Accepted Answer

Carrying costs include both the opportunity costs of having capital tied up in current assets that could be used elsewhere (A) and the explicit costs necessary to maintain the value of those assets (B), making C the correct answer.

Carrying Costs Are Associated with Having Current Assets and Fall