Answer: A. Less than net realizable value minus a normal profit margin.
Explanation:
LCM stands for lower of cost or market. According to certain accounting principles which you follow, the rule states that you must identify your inventory amount either lower of its replacement cost or its historical cost (cost at the time of purchase).
Therefore, Lower of cost cannot be less than net realizable value which is the NRV which takes into account impairments (loss to the inventory due to being idle) minus a normal profit margin.
