Which One of the Following Statements Concerning Net Working Capital

question 88

Multiple Choice

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

• A) A firm's ability to meet its current obligations increases as the firm's net working capital decreases.
• B) An increase in net working capital must also increase current assets.
• C) Net working capital increases when inventory is sold for cash at a profit.
• D) Firms with equal amounts of net working capital are also equally liquid.
• E) Net working capital is a part of the operating cash flow.

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