Flum Packages, Inc -If the Firm Was to Shift $2,000 of Current Liabilities

question 87

Multiple Choice

Flum Packages, Inc.

$\begin{array}{lrlr}\text { Assets }&&\text { Liabilities \& Equity }\\\hline \text { Current assets } & \$ 10,000 & \text { Current Liabilities } & \$ 5,000 \\\text { Fixed assets } & 20,000 & \text { Long-term debt } & 12,000 \\& & \text { Equity } & 13,000\\&----&&---\\\text { Total }&\$30,000&\text { Total }&\$30,000\\\end{array}$
-If the firm was to shift $2,000 of current liabilities to long-term funds, the firm's net working capital would_________the annual cost of financing would_________, and the risk of technical insolvency would_________, respectively.

• A) decrease; decrease; increase
• B) increase; increase; decrease
• C) increase; decrease; decrease
• D) decrease; increase; decrease

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Definitions:

Hemispheres

The two halves of the brain, known as the left and right hemispheres, each responsible for different functions and abilities.

Somatic Nervous System

The part of the peripheral nervous system that controls voluntary movements of the body's muscles and transmits sensory information to the central nervous system.

Somatic Nervous System

Part of the peripheral nervous system that handles voluntary control of body movements through control of skeletal muscles.

Skin, Muscles, and Joints

The bodily structures that respectively protect the body, facilitate movement, and connect bones, playing crucial roles in the human body's functionality.