Which One of the Following Statements Concerning Net Working Capital

question 284

Multiple Choice

Which one of the following statements concerning net working capital is correct?

• A) Net working capital is negative when current assets exceed current liabilities.
• B) Net working capital includes cash, accounts receivables, fixed assets, and accounts payable.
• C) Inventory is a part of net working capital.
• D) The change in net working capital is equal to the beginning net working capital minus the ending net working capital.
• E) Net working capital includes accounts from the statement of comprehensive income.

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Definitions:

Probability

A numerical expression of an event's probability, with the scale going from 0, symbolizing that the event cannot occur, to 1, signifying guaranteed occurrence.

Probability of Failure

The likelihood or chance that a system or component will fail to perform its required function within a specified period under normal operating conditions.

Binomial Random Variable

A type of discrete random variable that counts how often a particular event occurs in a fixed number of trials.

Binomial Table

A table used to find the probability of obtaining a fixed number of successes in a given number of trials in a binomial experiment.