Which of the Following Projects Would Increase Net Working Capital

question 246

Multiple Choice

Which of the following projects would increase net working capital the most?

• A) Financing a land purchase for a new manufacturing plant via a sale of new stock.
• B) Decreasing the amount of sales your firm makes on credit.
• C) Decreasing the number of product lines your firm carries.
• D) Changing your production schedule so that you produce goods only after a customer order.
• E) Using long-term bank credit to reduce payables.

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Definitions:

Favorable Stimulus

Any external cue or event that elicits a positive reaction, often reinforcing a behavior or creating a pleasant experience.

Shaping

a method of training by which successive approximations toward a desired behavior are reinforced until the behavior is achieved.

Successive Approximations

A method used in behavioral psychology involving the reinforcement of behaviors that are increasingly similar to the desired behavior.

Reinforcements

In psychology, reinforcements refer to incentives or consequences that strengthen the behavior they follow, making it more likely to occur in the future.