The Need to Manage Net Working Capital Arises Because

question 20

Multiple Choice

The need to manage net working capital arises because:

• A) financial management is naturally broken into those areas.
• B) shareholders want to ensure they receive dividend payments.
• C) there is a mismatch between the timing of cash inflows and cash outflows.
• D) the sum of current assets and current liabilities usually is zero.
• E) the capital structure pie is limited in size.

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Definitions:

Hypersensitivity

An exaggerated immune response to a foreign substance that can lead to allergies and other immune disorders.

Immune System

The body's defense system against pathogens, consisting of a network of cells, tissues, and organs that work together to protect the body.

Exaggerated Response

An exaggerated response is an overreactive or heightened reaction to a stimulus, which can be physiological or emotional.

Passive Artificial Immunity

Immunity acquired by the transfer of antibodies from another individual, as through injection or from mother to fetus across the placenta.