Question 1 (5 points) Which of the following statements regarding the application of the lower of cost or market (NRV) method is true? 8 Generally, historical cost is equal to the replacement cost When the lower of cost or market method is used, inventories are always valued at their selling price The lower of cost or market method is only applied on a total inventory basis because it is a more conservative approach The lower of cost or market method is an exception to the historical cost principle because of a permanent change in the value of the inventory and it must be written down