3. In no case can "market" in the lower-of-cost-or-market rule be more than A) estimated selling price in the ordinary course of business. B) estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal. C) estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal and an allowance for an approximately normal profit margin. D) estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal, an allowance for an approximately normal profit margin, and an adequate reserve for possible future losses. 4. The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the A) net realizable value. B) net realizable value less normal profit margin. C) replacement cost. D) selling price less costs of completion and disposal. 5. What is the rationale behind the ceiling when applying the lower-of-cost-or-market method to inventory? A) Prevents understatement of the inventory value. B) Allows for a normal profit to be earned. C) D) Prevents overstatement of the value of obsolete or damaged inventories. Allows for items to be valued at replacement cost.