Which One of the Following Will Decrease a fiRm's Net

question 77

Multiple Choice

Which one of the following will decrease a firm's net working capital?

• A) an increase in the cash account balance
• B) the payment of a receivable by a customer
• C) the purchase of a fixed asset using short-term debt
• D) the acquisition of a building using long-term debt
• E) the sale of inventory for cash

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Definitions:

Price Floor

A government or regulatory-imposed minimum price for a particular good or service, above the equilibrium price.

Government Purchases

Expenditures by government entities on goods and services that are part of government consumption or investment.

Producer Surplus

The difference between the amount producers receive from selling a good or service and the minimum amount they would accept for that good or service.

Price Floor

A price floor is a government- or authority-set minimum price below which a particular good or service cannot legally be sold, aiming to prevent prices from falling too low.