-
Ankitaverma
- Senior | Next Rank: 100 Posts
- Posts: 72
- Joined: Tue Nov 05, 2013 4:35 pm
- Followed by:4 members
Excess inventory, a massive problem for many busi
nesses, has several causes, some of which are unavoidable.
Overstocks may accumulate through production overruns or
Line errors. Certain styles and colors prove unpopular. With
(5) some products --computers and software, toys, and
books - last year's models are difficult to move even at
huge discounts. Occasionally the competition introduces a
better prduct. But in many cases the public's buying tastes
simply change, leaving a manufacturer or distributor with
(10) thousands (or millions) of items that the fickle public no
longer wants.
One common way to dispose of this merchandise is to
sell it to a liquidator, who buys as cheaply as possible and
then resells the merchandise through catalogs, discount
(15) stores, and other outlets. However, liquidators may pay less
for the merchandise than it cost to make it. Another way to
dispose of excess inventory is to dump it. The corporation
takes a straight cost write-off on its taxes and hauls
the merchandise to a landfill. Although it is hard to believe,
(20) there is a sort of convoluted logic to this approach. It is
perfectly legal, requires little time or preparation on the
company's part, and solves the problem quickly. The draw-
back is the remote possibility of getting caught by the news
media. Dumping perfectly useful products can turn into a
(25) public relations nightmare. Children living in poverty are
freezing and XYZ Company has just sent 500 new snow-
suits to the local dump. Parents of young children are
barely getting by and QRS Company dumps 1,000 cases of
disposable diapers because they have slight imperfections.
(30) The managers of these companies are not deliberately
wasteful; they are simply unaware of all their alternatives.
In 1976 the Internal Revenue Service provided a tangible
incentive for businesses to contribute their products to char-
ity. The new tax law allowed corporations to deduct the
(35) cost of the product donated plus half the difference
between cost and fair market selling price, with the proviso
that deductions cannot exceed twice cost. Thus, the federal
government sanctions -indeed, encourages - and above-cost
federal tax deduction for companies that donate inventory
to charity.
The passage suggests that which of the following is a kind of product that a liquidator who sells to discount stores would be unlikely to wish to acquire?
(A) Furniture
(B) Computers
(C) Kitchen equipment
(D) Baby-care products
(E) Children's clothing
Q/a-b can someone explain
nesses, has several causes, some of which are unavoidable.
Overstocks may accumulate through production overruns or
Line errors. Certain styles and colors prove unpopular. With
(5) some products --computers and software, toys, and
books - last year's models are difficult to move even at
huge discounts. Occasionally the competition introduces a
better prduct. But in many cases the public's buying tastes
simply change, leaving a manufacturer or distributor with
(10) thousands (or millions) of items that the fickle public no
longer wants.
One common way to dispose of this merchandise is to
sell it to a liquidator, who buys as cheaply as possible and
then resells the merchandise through catalogs, discount
(15) stores, and other outlets. However, liquidators may pay less
for the merchandise than it cost to make it. Another way to
dispose of excess inventory is to dump it. The corporation
takes a straight cost write-off on its taxes and hauls
the merchandise to a landfill. Although it is hard to believe,
(20) there is a sort of convoluted logic to this approach. It is
perfectly legal, requires little time or preparation on the
company's part, and solves the problem quickly. The draw-
back is the remote possibility of getting caught by the news
media. Dumping perfectly useful products can turn into a
(25) public relations nightmare. Children living in poverty are
freezing and XYZ Company has just sent 500 new snow-
suits to the local dump. Parents of young children are
barely getting by and QRS Company dumps 1,000 cases of
disposable diapers because they have slight imperfections.
(30) The managers of these companies are not deliberately
wasteful; they are simply unaware of all their alternatives.
In 1976 the Internal Revenue Service provided a tangible
incentive for businesses to contribute their products to char-
ity. The new tax law allowed corporations to deduct the
(35) cost of the product donated plus half the difference
between cost and fair market selling price, with the proviso
that deductions cannot exceed twice cost. Thus, the federal
government sanctions -indeed, encourages - and above-cost
federal tax deduction for companies that donate inventory
to charity.
The passage suggests that which of the following is a kind of product that a liquidator who sells to discount stores would be unlikely to wish to acquire?
(A) Furniture
(B) Computers
(C) Kitchen equipment
(D) Baby-care products
(E) Children's clothing
Q/a-b can someone explain
