A Company Has Current Assets of $200,000 and Current Liabilities

question 75

Multiple Choice

A company has current assets of $200,000 and current liabilities of $150,000.If they used cash to pay off some accounts payable what would the effect be on their working capital?

• A)Their working capital would increase.
• B)Their working capital would decrease.
• C)Their working capital would stay the same.
• D)The effect on the working capital would depend on the amount paid.

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Definitions:

World Price

The price at which a good can be bought or sold abroad.

Producer Surplus

A term often used to refer both to individual producer surplus and to total producer surplus.

International Trade

The exchange of goods, services, and capital between countries or territories, influenced by agreements, tariffs, and global economic policies.

Autarky Price

The price of a good or service within a country when it is completely self-sufficient and not engaged in international trade.