Relative to Cash Flows Affecting Net Working Capital, All of the Following

question 196

Multiple Choice

Relative to cash flows affecting net working capital, all of the following are true EXCEPT

• A) because most firms are unable to match cash inflows to outflows with certainty, current assets that more than cover outflows for current liabilities are necessary.
• B) cash outlays for current liabilities are relatively predictable.
• C) the more predictable the cash inflows, the less net working capital a firm needs.
• D) cash inflows are generally more predictable than cash outlays.

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Definitions:

Local Market

Refers to the economic market surrounding a specific area where transactions between consumers and producers occur within a close geographic region.

Barriers to Entry

Factors that prevent or hinder companies from entering a particular market or industry, such as high startup costs or complex regulations.

Consumer Ignorance

A situation where consumers lack necessary information about products or services, which can affect their buying decisions and market outcomes.

Inelastic Demand

A situation where the demand for a product does not significantly change in response to changes in its price.