Managers Must Understand How Transactions Affect Working Capital

question 72

Multiple Choice

Managers must understand how transactions affect working capital

• A)because GAAP does not allow companies with weak working capital to obtain loans.
• B)because lenders often use this to assess a company's ability to meet current obligations.
• C)so that management can avoid transactions that increase working capital.
• D)in anticipation of meeting creditors guidelines before issuing new stock.

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Definitions:

Attitudes

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor.

Awareness

The state of being conscious of something, which can involve attention, concern, or knowledge of a particular issue or fact.

Statistical Inference

The process of drawing conclusions from data subject to random variation.

Questionnaire Data

Facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors.