Which One of the Following Statements Concerning Net Working Capital

question 66

Multiple Choice

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

• A)Net working capital increases when inventory is purchased with cash.
• B)Net working capital must be a positive value.
• C)Total assets must increase if net working capital increases.
• D)A decrease in the cash balance may or may not decrease net working capital.
• E)Net working capital is the amount of cash a firm currently has available for spending.

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Definitions:

Comparative Advantage

The ability of a country or individual to produce a particular good or service at a lower opportunity cost than another entity, forming the basis for trade.

Almonds

Edible seeds of the almond tree, widely consumed worldwide and used in various foods and culinary preparations.

Export

Products or services shipped from one nation to another for the purpose of sale or exchange.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity, leading to more efficient trade possibilities.