Working Capital Represents Assets That Support Day-To-Day Operating Activities

question 123

Multiple Choice

Working capital represents assets that support day-to-day operating activities. Funding working capital requires:

• A)a commitment of capital (money)for a short time, i.e. a time comparable to the period for which working capital assets are held.
• B)a more or less permanent investment of funds to support ongoing daily operations.
• C)a commitment to allocate funds annually from the firm's capital budget.
• D)All of the above

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices.

Quantity Demanded

The complete quantity of a product or service that consumers are eager and financially able to acquire at a certain price.

Quantity Supplied

The overall quantity of a particular product or service that vendors are willing and prepared to trade at an agreed price during a defined time period.

Supply Increase

A situation in economics where the quantity of goods or services offered by businesses grows, typically leading to lower prices if demand remains constant.