Which of the Following Projects Would Increase Net Working Capital

question 35

Multiple Choice

Which of the following projects would increase net working capital the most?

• A) Financing a land purchase for a new manufacturing plant via a sale of new stock.
• B) Decreasing the amount of sales your firm makes on credit.
• C) Decreasing the number of product lines your firm carries.
• D) Changing your production schedule so that you produce goods only after a customer order.
• E) Using long-term bank credit to reduce payables.

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Definitions:

Sarbanes Oxley

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures, influenced by financial scandals.

U.S. Exchanges

Marketplaces in the United States where securities, commodities, derivatives, and other financial instruments are traded.

U.S Companies

Businesses or corporations that are registered and operate within the United States.

Outstanding Checks

Checks that have been written and recorded in the issuer's ledger but have not yet been cleared by the bank.