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Change in inventories may be planned or unplanned. In case of an unexpected fall in sales, the firm will have unsold stock of goods which it had not anticipated. Hence, there will be ______________.

Solution

✅ Correct Option: 1

An unexpected fall in sales leaves the firm with unsold goods it did not anticipate holding, so inventories rise unintentionally. This is unplanned accumulation of inventories.

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