Which of the Following Is True About Net Working Capital

question 202

Multiple Choice

Which of the following is true about net working capital?

• A) Projects in which a firm expands its operations and sales will generally not lead to changes in net working capital.
• B) Changes in net working capital account for differences between accounting sales and costs and actual cash receipts and payments.
• C) Net working capital is typically an expense at the beginning of a project and an equal revenue source at the end of a project; thus, there is no impact on project NPV.
• D) Dollar changes in the cash account are generally equal to changes in net working capital.
• E) Net working capital is not considered an investment of the firm.